Wheat prices surge to record high

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Javier Blas, FT Syndication Service
LONDON: Wheat prices Friday surged more than 6.0 per cent to a fresh all-time high as food-importing countries renewed stockpiling amid extremely tight global supplies.
In Chicago, wheat topped the $8.00-a-bushel level for the first time as technical buying and speculators covering previous bearish bets pushed prices up.
South Korea bought new wheat cargoes on Friday to buffer its inventories as global stockpiles fell to their lowest level since 1979. India, Egypt and Taiwan are all expected to buy more wheat in the next week.
The sharp price increase, which came on top of the 5.0 per cent jump on Thursday, reinforced fears of a spike in food inflation as industry begins to pass the costs on to consumers.
In London, Euronext.liffe November feed wheat jumped £11, or 6.3 per cent, to a record high of £186 a tonne. In Paris, Euronext.liffe milling wheat rose euro7.25, or 2.9 per cent, to euro262 a tonne.
Chicago Board of Trade December wheat hit a fresh all-time high of $8.07 a bushel and in London morning trade was 22 cents, or 2.7 per cent, higher at $8.06 a bushel.
The wheat market is increasingly concerned about weather damage to the upcoming southern hemisphere crop. Australia's main wheat states of New South Wales, Victoria and South Australia have suffered hot and dry weather for the past two months.
Last season, a severe drought cut the Australian crop to 10m tonnes, less than half the usual 24m tonnes. Traders said the Australian crop may again fall below 20m tonnes. European and Canadian wheat crops were earlier this year damaged by bad weather.
Global wheat inventories had fallen to their lowest level since 1979, according to the International Grain Council, the intergovernmental organisation.
In other commodities, crude oil rose towards $74 a barrel as traders began to focus on a gathering storm in the Atlantic that next week could approach the oil and natural gas rich region of the Gulf of Mexico.
Nymex October West Texas Intermediate was 24 cents higher to $73.60 a barrel while ICE October Brent rose 19 cents to $72.09 a barrel.
Base metals move higher with the exception of aluminum. On the London Metal Exchange, copper rose 0.5 per cent to $7,445 a tonne. Aluminum fell 0.1 per cent to $2.530 a tonne.
Tin moved higher 0.6 per cent to $15,400 a tonne on renewed concerns about Indonesia's tin supplies. The country is the world's second largest tin producer.