Wheat Jumps Most in Two Months as Investors Unwind Bearish Bets

Wheat rose the most in two months on speculation that yesterday’s plunge in prices prompted investors to unwind bets that futures would decline.

On the Chicago Board of Trade, net-short positions, or wagers on a price slide, outnumbered long positions by 50,655 futures contracts as of April 13, or double the amount at the end of December, government data show. Yesterday, the price tumbled 23 cents a bushel or 4.6 percent, the most since Jan. 12.

“When you’re 20 cents lower, then there’s a good chance for a bounce,” saidDarrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. “We did a lot of technical damage.”

Wheat futures for July delivery rose 19 cents, or 4 percent, to $4.985 a bushel on the CBOT, the biggest gain for a most-active contract since Feb. 10.

Japan said today it would buy 157,000 metric tons of wheat, including 115,000 tons from the U.S., the world’s biggest shipper.

“The Asian economies are slowly getting better, and there’s a little more of an opening,” Holaday said. “I don’t think the demand is robust, but it’s better.”

Futures have dropped 7.9 percent this year because of less demand for grain from the U.S. amid rising global inventories.

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