Source: Tehran Times

CHICAGO (Bloomberg) — Wheat rose after Pakistan, Asia’s third-biggest producer, said it will produce less of the grain than forecast after high fertilizer costs prompted farmers to reduce planting.

Pakistan will harvest 22 million metric tons, less than the 24 million tons estimated in October, the farm ministry said on Wednesday. Fertilizer use fell to 600,000 tons, less than half of the amount last year, after prices jumped 44 percent, the ministry said. A smaller crop may force the country to import wheat, which has doubled in price in the past year.

“Traders will be very keen on watching for any tenders by either Pakistan or India,” said Mike Zuzolo, a chief market analyst at Risk Management Commodities in Lafayette, Indiana. “If they do tender, this will suggest to the trade that there are indeed problems of self-sufficiency in these countries for wheat.”

Wheat futures for July delivery rose 13 cents, or 1.4 percent, to $9.475 a bushel on the Chicago Board of Trade. Futures reached a record $13.495 on speculation global stockpiles will decline to the lowest in 30 years, after excessive rain hurt U.S. crops in 2007 and drought curbed yields in Canada and Australia.

Shakeel Ahmed Khan, Pakistan’s wheat commissioner, said last month that unless farmers get the favorable weather needed to reach a 24 million-ton goal, the country will need to import grain.

Grain smugglers

Smugglers have worsened the supply situation, sneaking wheat into neighboring Afghanistan where they can sell the grain for about twice what they can get in Pakistan, officials said.

Farmers in Pakistan sow the crop in November and December and harvest it from April to June. The country is the world’s sixth-largest wheat producer. China and India harvest more in Asia.

Rain persisted in the U.S. eastern Midwest from Arkansas to Ohio, flooding fields and lowering yield prospects for crops emerging from winter dormancy.

Part of the region got as much as six times the normal amount of moisture in the past month, National Weather Service Data show. More rain and thunderstorms are expected in the next five days, private forecaster Meteorlogix LLC said in a report on Wednesday.

Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, behind corn, soybeans and hay, government data show.

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Tags: economy, Fertilizer, Power, Smugglers, Trade, Water crisis, Wheat crisis