Future Wheat Prices Rise on Countries Boost Inventories

Prices wheat futures rose to a 29-month high on signs that countries are boosting grain inventories after food inflation spurred unrest in North Africa. Wheat futures for March delivery rose 15.5 cents, or 1.8 percent, to $8.745 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $8.8075, the highest for a most-active contract since Aug. 25, 2008.

Egypt, the world?s biggest importer, bought 55,000 metric tons from the U.S. in a tender on Feb. 5. Iraq, Turkey, Bangladesh and Algeria have issued tenders since Feb. 6, and Iran and Saudi Arabia may be in the market ?soon,? the CME Group Inc. said in a report on its website.

?We had all these tenders that showed up over the weekend,? said Jeff McReynolds, the owner of McReynolds Marketing and Investments in Hays, Kansas. ?It still shows a lot of demand showing up in the world market, and it hit all at once.?

Prices surged 81 percent in the past year as drought slashed supplies in Russia and floods eroded crops from Canada to Australia. Tens of thousands of Egyptian protesters have rallied in the streets, chanting that the government is ?illegitimate? as surging food costs and high unemployment sparked unrest.

Wheat was the fourth most-valuable U.S. crop in 2009 at $10.6 billion, behind corn, soybeans and hay, government data show.

German wholesale prices have surged back to the peak they reached in July 2008, nearly three years ago before the worldwide financial crisis, statisticians said Friday.

In related news, German farmers say they have already sold about half the wheat they expect to harvest in August.

Millers are buying the wheat in advance to beat the rush as world commodity prices race ahead. The farmers reported the sales in a survey by an national agricultural research organization, DLG, based near Frankfurt.

DLG markets tracker Mechthilde Becker-Weigel said wheat futures were now back to the record level of 2008 on the back of high demand from North African nations and China and a slump in Russian exports.

The Federal Statistics Office said overall wholesale prices paid by merchants and industry in Germany had jumped 1.2 per cent, month on month, in January, and were now equal to the old, 2008, record.

Grain, seeds and fodder were the fastest-rising price group, up 71 per cent in the space of a year, the statisticians said.