Wheat Jumps on Dry Weather in Argentina, Australia

By: AP
By: AP

NEW YORK (AP) -- Wheat prices jumped above $9 a bushel Wednesday on expectations that warm, dry weather in Argentina and Australia will hurt crops and tighten world supplies.

In other commodities trading, crude ended higher for a second day while gold and silver prices also rose.

Wheat for December delivery surged 29.25 cents to settle at $8.995 a bushel on the Chicago Board of Trade, after earlier rising to $9.03 a bushel.

Wheat's rally boosted other agriculture futures. December corn added 10.5 cents to settle at $5.95 a bushel, while November soybeans rose 24 cents to settle at $13 a bushel.

Hot, dry weather in southern hemispheric wheat-growing countries, especially Argentina and Australia, have fed concerns about slow crop development and sparked a round of fund buying, said Vic Lespinasse of Grainanalyst.com.

Also boosting prices were concerns about Midwest corn and soybean crops, which have shown mixed results after a late growing start caused by severe June flooding. Corn and bean yields so far appear above average, but overly dry conditions could stunt growth heading into the fall harvest.

"If a good rain doesn't come soon, corn yield will go down and some of bean pods will fail to produce any beans, so the situation bears watching," Lespinasse said.

Meanwhile, crude oil bounced back toward $115 a barrel as traders shrugged off a huge increase in U.S. crude inventories.

Light, sweet crude for September delivery rose 45 cents to settle at $114.98 a barrel on the New York Mercantile Exchange, after rising as high as $117.03. The September contract expired on Wednesday; the October contract finished up $1.01 at $115.56 a barrel.

Other energy futures also rose. Heating oil futures added 3.98 cents to settle at $3.1635 a gallon on the Nymex, while gasoline futures rose 4.64 cents to settle at $2.9103 a gallon.

In precious metals, gold fell slightly Wednesday after the dollar strengthened against the euro, diminishing demand for inflation hedges.

Gold for December delivery fell 50 cents to settle at $816.30 an ounce on the Nymex, after earlier falling as low as $805.20.

Other precious metals also traded lower. December silver fell 6.7 cents to settle at $13.22 an ounce on the Nymex, while December copper fell 3.15 cents to settle at $3.427 a pound.

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