Wheat rose to a four-month high in Chicago as Australia, forecast to be this year’s fourth-largest shipper, cut its export estimate after rainfall delayed harvesting and reduced grain quality. Wheat for March delivery added 1.2 percent to $8.025 a bushel at 11:48 a.m. London time on the Chicago Board of Trade. The grain reached $8.095, the highest level for a most-active contract since Aug. 6, as it advanced for a fifth day. Australia’s wheat exports may be 16 million metric tons, compared with an earlier estimate of 18.4 million tons, the Australian Bureau of Agricultural & Resource Economics & Sciences said today. “The full impact of the downgrade in quality of wheat and barley will not be known until more of the harvest is complete in southern regions,” it said. “Less supply from Australia may increase demand for the U.S. crop,” said Toshimitsu Kawanabe, an analyst at commodity broker Central Shoji Co. in Tokyo. Wheat has jumped 67 percent since the end of June as drought destroyed grain in Russia, floods harmed fields in Canada, and dry weather in the U.S. Great Plains reduced the outlook for winter crops. The U.S. is forecast to be the top exporter in the 2010-2011 season, ahead of the European Union, Canada and Australia, the U.S. Department of Agriculture says. Exports From Australia Milling wheat for January delivery traded on NYSE Liffe in Paris climbed 1 percent to 237.50 euros ($317.32) a ton after reaching 242.50 euros. Lower shipments from Australia may drive wheat prices higher as the USDA forecasts a 22.9 million-ton shortfall in global output this season, the first deficit in three years. Australian output may be a record 26.8 million tons in the 2010-2011 season, compared with a September prediction of 25.1 million tons, as favorable conditions boosted yields in the country’s east before recent rainfall, the bureau said. Wheat-growing areas in eastern Australia may get more rain this week than the region usually receives in the whole of December, extending floods that have already damaged crops, Mike Tannura at T-Storm Weather said yesterday. As much as 35 percent, or 5 million tons, of the east coast wheat crop may be downgraded to feed quality, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report on Dec. 5. The bank, which estimates the national crop at 22.3 million tons, cut its export forecast to 14 million tons from 16 million tons. Corn for March delivery rose 1 percent to $5.735 a bushel in Chicago. Soybeans for January delivery added 1 percent to $13.01 a bushel. Brazil will harvest 66.78 million tons of soybeans in the year that starts Feb. 1, down from 68.7 million a year earlier, the USDA’s Foreign Agricultural Service said yesterday in a report. Soybean exports may fall to 30.2 million tons from 30.5 million tons a year earlier, it said. “In Brazil, dry conditions are hurting the development of soy, particularly in Mato Grosso, where plots have been replanted with cotton,” Paris-based farm adviser Agritel said in a market comment. “That is supporting soybean prices.” To contact the reporter on this story: Jae Hur in Tokyo at jhur1@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net. To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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