Wheat futures rise to new high

Wheat futures prices hit fresh record highs Wednesday, extending the powerful rally of recent months amid expectations that global stockpiles will fall to the lowest levels in 26 years.

Bad weather in many growing regions around the planet has driven prices up.

September wheat futures in Chicago jumped 21.5 cents to $7.42 a bushel. The price was $4.38 at the end of March.

Ukraine, the world’s seventh-largest wheat exporter, will ship 58% less grain this year after a three-month drought, the country’s agriculture minister said Wednesday.

What’s more, hotter-than-normal weather may reduce production in Australia, which was expected to be the second-largest exporter in the marketing year that started June 1.

“The Ukraine is fairly well-known, but more important is the Southern Hemisphere news,” said Larry Glenn, owner of Glenn Commodities in Wichita, Kan.

Global inventories will fall to 114.8 million tons by the end of May, the lowest since 1982, the U.S. Department of Agriculture estimates.

The latest rally in prices was sparked by an early April freeze in the U.S. plains, followed by excessive rain coupled with disease problems.

Production also has been hurt in Canada, where this year’s wheat crop has been estimated at 20.3 million tons, down almost 20% from last year.

Prices were pushed up this week after India said it would buy more wheat this year to boost emergency reserves to keep food prices lower.

Other countries that need wheat are willing to pay record prices because they don’t want to end up with diminished stockpiles like India, the second-biggest consumer of the grain behind China, Glenn said.

But the bullish outlook could be tempered in the months ahead, some experts say.

Southern Hemisphere crops will reach a key development stage in the next four to six weeks, when rain will be critical.

Then in October and November, the market will be able to digest the first indications of Northern Hemisphere planting for next year, which analysts expect to show a big increase for wheat, given the current high prices.