Wheat Prices Hit 15-Year Highs
Wheat prices zoomed to 15-year highs Thursday, fed by a report of a huge grain purchase by Russia amid the lowest world supplies in two decades.
In addition, Europe slapped on a rare tax to limit wheat exports, which further added to the market frenzy.
December wheat futures on the Chicago Board of Trade jumped 8.25 cents to $5.16 a bushel, after trading as high as $5.22. That was the highest a near-term wheat contract has traded since the $5.445 per bushel of October 1980. The all-time high was $6.45 in 1974.
“We could put another 50 cents per bushel on,” said Refco Inc. grain market analyst Pat O’Connell.
In Kansas City, hard red winter wheat futures rose to a 21-year high, with the December contract hitting $5.35 during trading.
Tight world wheat supplies, brought on by poor 1995 harvests in the United States, Europe and Russia, have sent importers rushing to secure adequate coverage.
News Thursday that Russia had recently purchased 1.5 million metric tons of Western corn and wheat to compensate for its crop shortfalls was followed by the European Union’s decision to place a tax on certain EU wheat exports, to try to discourage a further drawdown of already meager supplies.
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