Wheat Rises on Speculation U.S. Crops Will Be Hurt by Weather

Wheat rose for the fourth time in five sessions on speculation that U.S. crops will be harmed by adverse weather sometime during the growing season.

Investors may be unwinding bets that prices would fall with new wagers that crop yields will be reduced by excess rain or drought. Speculative short positions outnumbered long positions by 50,655 contracts on the Chicago Board of Trade in the week that ended on April 13, the Commodity Futures Trading Commission said last week.

“The hedgers and funds are getting positions ahead of the growing season,” said Larry Young, a senior portfolio manager at Covenant Trading LLC in Chicago. “We eased into the spring, so there’s no weather premium built in.”

Wheat futures for July delivery rose 1.25 cents, or 0.3 percent, to $4.9975 a bushel on the Chicago Board of Trade. The most-active contract is down 7.7 percent this year because of reduced demand for U.S. grain and rising global stockpiles. The price earlier fell as much as 1 percent.

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