Wheat Rises to 29-Month High as Countries Boost Inventories

Wheat futures rose to a 29-month high on signs that countries are boosting grain inventories after food inflation spurred unrest in North Africa.

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.”

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.

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.

(Source: http://www.bloomberg.com/news/2011-02-08/wheat-futures-extend-rally-in-chicago-to-highest-price-since-august-2008.html)