Wheat Soars as La Nina's Persistence Threatens Harvests From China to U.S.

Wheat crops in China, the world's largest producer, and the U.S. threatened by the continuing drought and La Niña persists, forecasters said.
Countries will be the last to leave the drought associated with La Niña, a cooling of Pacific Ocean, and conditions may persist for two months, said British and Telvent DTN Weather Services Inc. $ 8.50 wheat may average the bushel in Chicago from now to June 30, said Abah oFono, an agricultural commodities analyst at Standard Chartered Bank in Singapore. That's 12 percent more than the current price.
The wheat rose 5 percent yesterday as grain prices soared after the U.S. maize stocks fell to 6.52 billion bushels in early March, the lowest for the date since 2007, according to the U.S. Department of Agriculture. the world food costs rose to a record in February, the United Nations estimates, contributing to instability in North Africa and the Middle East and help bring down the leaders in Tunisia and Egypt.
"If it takes another two months, we will be in serious trouble," said Jim Dale, a meteorologist at high risk in the British time, in an interview. "Time is of the essence. If you lose time, you're losing money, the quantity and quality."
Sustained dry conditions in China and the U.S. Parchment is already damaged crops in Texas and Oklahoma and is being developed in northern China, BWS and DTN said.
Futures Climb
"The time will be key," said Sudakshina Unnikrishnan, analyst at Barclays Capital said in an interview in Singapore yesterday. "Even if we have an upward movement of cultivated area does not automatically translate into an increase in production. "Winter wheat is called 71 percent of U.S. acreage and harvested from June, according to USDA.
Wheat futures rose yesterday even as the USDA estimates the area planted by farmers in the country will increase by 8.2 percent over the previous year to 58 million acres (23.5 million hectares). The contract for May delivery fell 0.3 cent to $ 7.6075 a bushel today.
Texas, the second largest winter wheat-growing state in the U.S., is having its worst drought in 44 years, according to state climatologist, and dry climate extends to Oklahoma, Colorado and Kansas.
Southeastern Oklahoma in most of central and eastern Texas has extreme drought, which could escalate "if the rains do not materialize soon," according to the weekly Drought Monitor published by the National Mitigation Drought in Lincoln, Nebraska, for the week March 29.
Plowing fields
The wheat crop in the U.S. Southern Plains is "likely to be reduced because of neglect of surface - farmers plowing because it has virtually nothing to produce - and yields in the wheat harvest is likely to be low as well," Bryce Anderson , an agricultural meteorologist at DTN, said in an emailed response to questions from Bloomberg. "The areas of wheat in the U.S. and China are in line to be the last to recover."
China produced about 115.1 million tons last season, which accounts for 17 percent of the global harvest, USDA data show.
"There is no signal in China until the rain to help with prolonged drought during the next 10 days," said Dale, who correctly predicted the drought in Argentina and the coldest in the UK in December, registration. "China and the U.S. is likely to come out of it last time," he said, referring to La Niña.
The climate phenomenon can come back after eight months, threatening the nearby plantations, Dale, said yesterday.
"We have to be guarded," he said. "The girl is not dead. It's just going to sleep for a while. We're not sure if its going to be lengthy siesta."
"Dangerous levels'
The return of La Niña may derail the efforts of farmers to increase production of corn, wheat and other crops, causing another rise in prices. Wheat rose 62 percent in the last year, rising to a 30-month high in February. Corn more than doubled over the same period, while soybeans advanced 49 percent.
Prices of maize, soybeans, wheat and rice rose to the highest since 2008, this year, when rising costs spurred riots from Haiti to Egypt. About 44 million people have been pushed into poverty since June by the "dangerous levels" of food prices, World Bank President Robert Zoellick said in February.
U.S. corn acreage this year will be about 92. 178 million acres, the second largest since 1944, as agricultural profits rise while increasing demand for food stocks and biofuels world courts.
"The new crop is not expected to replenish inventories to a significant extent, keeping prices high in the new season," according to a report by Rabobank Agri commodity markets research emailed today.

(Source: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJ738cc9Hiac)