Spring Wheat Surges on Drought News.
Futures soared as much as 8.5 percent on Thursday, the most intraday since 2010, after Canada cut its planting outlook and drought conditions expand in U.S. growing states.
“With smaller wheat acres and some production issues in Canada, as well, that means there’s less product there to market, and demand has not backed off from what we can see.” Spring wheat futures for September delivery jumped by as much as the exchange’s 60-cent limit on Thursday, reaching a three-year high of $7.68 a bushel on the Minneapolis Grain Exchange.
Prices were at $7.50 at 12:43 p.m. local time.
Winter wheat futures in Chicago are surging, too.
The amount of land gripped by extreme drought expanded to just over 25 percent, up from about 8 percent a week ago.
A drought-busting rain isn’t yet in the forecast, said Alex Edwards, a National Weather Service meteorologist in Bismarck, North Dakota.
Withering Crops Canada’s wheat seeding fell 3.7 percent from a year earlier to 22.4 million acres, trailing the 23.2 million the government forecast in April and the 22.8 million expected by analysts in a Bloomberg News survey, Statistics Canada said Thursday.
Spring wheat futures may reach the $8-$10 range, Societe Generale SA analyst Rajesh Singla said in a Thursday report.
The Minneapolis exchange has set a trading volume record this month.