Wheat Fields Parched By Drought From U.S. To Russia: Commodities

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http://www.bloomberg.com/news/2012-05-23/wheat-fields-parched-by-drought-from-u-s-to-russia-commodities.html

Droughts withering wheat crops from the U.S. to Russia to Australia will probably spur the biggest reduction in global supply estimates since 2003 and drive prices to the highest in almost a year.

Kansas, the top U.S. grower of winter wheat, is poised for its driest May on record, the state’s climatologist estimates. Ukraine and Russia, accounting for 11 percent of world output, have endured drought conditions for three months, University College London data show. The U.S. Department of Agriculture may cut its global crop estimate by 1.2 percent next month, the biggest drop in a June report since 2003, according to the average of 18 analyst estimates compiled by Bloomberg.

Wheat traded in Chicago rose as much as 18 percent in the 10 days through May 21 on concern that the market is returning to the droughts of 2010. Russia and Ukraine curbed exports that year and prices more than doubled to $9.1675 a bushel by February 2011, the month in which world food costs tracked by the United Nations reached a record. Analysts surveyed by Bloomberg expect futures to rise 12 percent to $7.51 by mid- July.

“In 2010, everyone was talking about dryness in Russia even in May, but no one was paying attention,” said Chris Gadd, an analyst at Macquarie Group Ltd. in London. “Because you’ve had the history of 2010, people are going to the other extreme and overreacting a little. If weather conditions deteriorate further, production estimates could go a lot lower.”

[HereSince1628]

1. While in south asia bumper wheat crop mildewed and rotted in gigantic piles.

http://www.irrawaddy.org/archives/3956