Wheat prices climb after Russia cuts crop forecast

By The Associated Press
The Associated Press
Friday, March 18, 2011; 4:27 PM

-- Wheat prices rose Friday after Russia cut its forecast for this year's harvest, renewing concerns that global supplies will tighten.

Deputy Prime Minister Viktor Zubkov said the forecast called for 84 million to 85 million tons of wheat to be harvested this year, compared to an earlier estimate of 85 million to 87 million tons.

Russia was one of the world's largest wheat exporters until last year when its crop was damaged by a drought that prompted an export ban. Zubkov said the ban remains in effect.

In the U.S. dry conditions have created problems for the winter wheat crop in the Great Plains.

While global wheat supplies are ample, stockpiles remain tight in the United States. Traders are speculating that global supplies may grow smaller, which could cause prices to rise.

Wheat for May delivery rose 12.75 cents, or 2 percent, to settle at $7.23 a bushel.

In other trading, corn prices soared as strong export sales raised expectations of improving demand.

The U.S. Agriculture Department said Thursday that corn exports totaled 1.036 million metric tons for the week that ended March 10. That marked the sixth week out of the last seven that corn exports have topped 1 million metric tons, according to an analysis by PFGBest.

The report led traders to expect that demand will remain strong because of short global supplies of corn, said Mike Zuzolo, president of Global Commodity Analytics & Consulting.

In contracts for May delivery, corn added 37 cents, or 5.7 percent, to $6.835 a bushel. Soybeans rose 27.25 cents, or 2 percent, to settle at $13.625 a bushel.

The cease-fire in Libya sent oil prices lower as concerns eased about supply disruptions in the Middle East and North Africa.

Benchmark oil for April delivery lost 35 cents to settle at $101.07 a barrel on the New York Mercantile Exchange.

Heating oil fell 4.06 cents to settle at $3.0243 a gallon, gasoline gave up 0.12 cent to $2.9494 a gallon and natural gas added 1 cent to $4.168 per 1,000 cubic feet.

Metals were mostly higher.

In May contracts, gold added $11.90 to settle at $1,416.10 a share, silver rose 80 cents to $35.058 an ounce and copper slipped 0.5 cent to $4.339 a pound.

April platinum gained $16.50 to settle at $1,723.40 an ounce and June palladium rose $14.40 to $731.20 an ounce.

© 2011 The Associated Press