Wheat May Gain as 8.8% Tumble in Three Days Attracts Investors, Importers

Wheat futures may gain after a decline of 8.8 percent in three days lured importers and investors before a U.S. government report that may cut estimates of global grain supplies. Soybeans declined.

May-delivery wheat advanced as much as 0.9 percent to $7.6575 a bushel on the Chicago Board of Trade, snapping its longest losing streak in two months. The contract traded little changed at $7.59 a bushel at 4:05 p.m. Singapore time.

Japan bought 135,823 metric tons of milling wheat in a regular tender today, the Ministry of Agriculture, Forestry and Fisheries said. That’s the biggest volume bought by Asia’s second-largest buyer in three weeks.

“Prices now are looking quite attractive,” Tetsu Emori, a commodity fund manager at Astmax Co., said by phone from Tokyo. “Consumers and speculators are back in the market.”

Global wheat inventories may drop to 177.56 million tons at the end of this season, from 197.6 million tons a year ago, according to the average estimate of 12 analysts surveyed by Bloomberg news last week. That is smaller than the U.S. Department of Agriculture forecast of 177.77 million tons last month. The agency will release its latest supply projections at 8:30 a.m. inWashington today.

Wheat inventories in the U.S., the world’s largest shipper, will be cut to 809.6 million bushels, from the USDA’s estimate of 818 million bushels last month, on rising demand from nations seeking to rebuild reserves, according to the average estimate of 22 analysts surveyed by Bloomberg News.

European Shipments

Shipments from Australia, the fourth-largest exporter, increased by 41 percent to 1.8 million tons in January, the Australian Bureau of Statistics said on its website today.

France, the second-biggest exporter, has predicted record sales outside the European Union as Middle East and North African nations boost stockpiles to damp food prices that contributed to riots across the region.

Exports outside the EU will be 12.6 million tons in the 12 months to June, 500,000 tons more than last month’s forecast, FranceAgriMer, the country’s crops office, said in a report yesterday. The surge in demand will cut the country’s stockpiles to a seven-year low by the end of the season.

Soybeans for May delivery slipped 0.9 percent to $13.37 a bushel on the Chicago Board of Trade, after losing 4.6 percent in the past three days.

Global stockpiles of soybeans will probably be 59.3 million tons at the end of this season, higher than the 58.2 million tons forecast by the USDA last month after production prospects in South America improved, according to the average estimate of 13 analysts surveyed by Bloomberg.

May-delivery corn declined 0.5 percent to $6.975 a bushel. Inventories of corn around the world will probably drop to 121.8 million tons, smaller than the 122.5 million tons the USDA estimated last month, according to the average estimate of 13 analysts surveyed by Bloomberg News.

(Source: http://www.bloomberg.com/news/2011-03-10/wheat-advances-as-8-8-tumble-in-three-days-attracts-investors-importers.html)