Wheat futures advanced, extending last year’s jump, as dry weather may hurt the crop in the U.S., the world’s largest shipper, and rising global demand threatens to outstrip production. Wheat for March delivery advanced as much as 1.3 percent to $8.0475 a bushel in Chicago, after jumping 47 percent in 2010. The contract traded at $8.0475 a bushel at 10:56 a.m. in Singapore. The central U.S. was forecast to have dry weather the rest of the week, keeping the hard red winter-wheat crop “mired in drought,” while soft red winter-wheat “continues to emerge from drought,” Mike Tannura, the president of T-Storm Weather LLC, said in an e-mail yesterday. “Of course, that adds to concerns about global supply,” Eric Bailon, president at Manila-based Paritas Trading Corp., which supplies at least 20 percent of Philippine feed-wheat imports, said by phone today. “The market is tight and the strong fundamentals are attracting speculative money as well.” Egypt, the world’s largest wheat buyer, may import 10.2 million metric tons in the year that began July 1, up from an estimated 9 million tons a year earlier, a unit of the U.S. Department of Agriculture said in a report posted on its website Dec. 31. Production may drop to 8.5 million tons from 8.523 million, the USDA’s Foreign Agricultural Service said. That compares with the USDA’s import forecast for Egypt of 9.8 million tons this season, and a production estimate of 8.6 million tons in its Dec. 10 report. Global wheat production will trail demand by 20 million tons, taking inventories at the end of this season to the lowest level since the 2008-2009 year, the USDA forecast on Dec. 10. Production in the current season is forecast to lag behind demand for the first time since 2007-2008 after harvests were hurt by the worst drought in at least half a century in Russia, dry weather in other parts of eastern Europe, excessive rains in Canada and flooding in Pakistan. Corn for March delivery lost 0.2 percent to $6.2775 a bushel. Prices advanced 52 percent last year. March-delivery soybeans dropped 0.2 percent to $14 a bushel, after last year’s 34 percent jump. ---With assistance from Jeff Wilson in Chicago. Editors: Matthew Oakley, Jake Lloyd-Smith. To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net To contact the editor responsible for this story: Richard Dobson at rdobson4@bloomberg.net

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