Chicago: Wheat prices rose on Thursday, marking the biggest two-day gain in four months, as investors bet prices will climb this year because of shrinking stockpiles and growing global demand.
Global inventories of the grain are expected to fall to 110.1 million tonnes (mt) by the end of the marketing year on 31 May—an 11% drop from the previous year, the US department of agriculture said on 11 December.
Wheat importers snapped up supplies earlier this year, partly on concern farmers wouldn’t produce enough to meet their needs.
“The perception is that in 2008 commodities are going to be a moneymaker, and wheat’s a part of that because of the low carryout and the uncertainty about the crops around the world,” said Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage in Des Moines, Iowa.
Wheat futures for March delivery rose 30 cents, or 3.3%, to $9.45 (Rs373.28) a bushel on the Chicago Board of Trade, the second straight day futures gained the most allowed by the exchange.
The price jumped 6.8% in the past two sessions, the biggest two-day increase since 5 September. Futures gained 77% in 2007 and reached a record $10.09 on 17 December after drought hurt crops in Canada and, for a second straight year, in Australia. In the US, a freeze in April and excessive rains curbed yields.
The International Grains Council estimates farmers responded by sowing 4% more of the grain.