Wheat Futures Climb as Speculators Unwind Bets on Market Slump

Wheat rose for the second straight day as some speculators unwound bets on a market slump after futures failed to drop below a widely followed price-chart level.

The grain remained above the 10-day moving average of $4.7625 a bushel, supporting prices, said Mike Zuzolo, the president of Global Commodity Analytics in Lafayette, Indiana. Wheat has climbed 5.3 percent this month.

“When we hit the 10-day moving average, it initiated a buy signal,” Zuzolo said. “We may be getting some support from fund short-covering.”

Wheat futures for July delivery rose 8.25 cents, or 1.7 percent, to $4.8875 a bushel on the Chicago Board of Trade. Yesterday, the price climbed 0.3 percent.

The most-active contract has dropped 9.7 percent this year as an increase in global inventories eroded demand for U.S. exports.

Ukraine said today that spring-grain planting as of yesterday fell 39 percent from a year earlier. Spring wheat was seeded on 165,400 hectares (408,700 acres), indicating planting is about 44 percent complete, the agriculture ministry said.

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

Tony C. Dreibus
Source: Bloomberg