Futures hit record on US demand buzz

Wheat futures in Chicago rose to a record, extending a rally for a second day, on speculation that demand for US grain will keep rising as unfavourable crop weather hurts production in major exporters.

Bangladesh plans to buy 88,000 tonnes of imported wheat in a tender on October 1. Algeria has also been seeking the grain, while Egypt, Iraq, India, Morocco, Japan, Korea and Taiwan bought last week. Overseas orders for US wheat since June 1 are almost twice the level a year earlier, US government data shows.

Prices for wheat, used to make bread, noodles and cakes as well as feed for livestock, have more than doubled in the past year as adverse weather in Ukraine, Canada, Europe and Australia damaged crops. Global stockpiles will fall to the lowest in 26 years by May 31, according to the US Department of Agriculture.

"Global supplies of wheat are very short,'' Takaki Shigemoto, an analyst at Okachi & Co. in Tokyo, said today. "At the same time, we can't see any sign of slowing demand.''

Wheat for December delivery rose as much as 28.25 cents, or 3.4 per cent, to $8.7175 a bushel, 1.75 cents below the daily maximum allowed by the Chicago Board of Trade.