Wheat extends drop to near four-year low as global supply climbs
2014-09-12 10:59:22
Wheat fell for a fifth day to trade near a four-year low after the U.S. government forecast record global production and expanding stockpiles. Corn and soybeans headed for the biggest weekly losses since July.
Wheat for December delivery lost as much as 0.8 percent to $5.0525 a bushel on the Chicago Board of Trade and was at $5.0775 by 3:13 p.m. in Singapore. Prices touched $5.03 yesterday, the lowest for a most-active contract since July 2010. Futures are set to decline 5.1 percent this week.
Prices tumbled 22 percent in the past year as corn slumped 26 percent and soybeans lost 29 percent on the outlook for surging world output. Increasing supplies of crops are helping cut global food prices, with a United Nations’ index slumping to a four-year low in August. Global wheat output and stockpiles at the end of 2014-2015 will be bigger than forecast last month, the U.S. Department of Agriculture said yesterday.
“You’ve got more European wheat, which seems to satisfy the market right now, and the Russian wheat crop looks better as well,” Wayne Gordon, a commodity analyst at UBS AG in Singapore, said by phone today. “The market seems to be completely ignoring the individual quality risks.”
Global production may total a record 719.95 million metric tons from 716.09 million tons forecast in August, according to the USDA. The agency raised its estimates for European Union output to 150.97 million tons from 147.87 million tons and boosted Ukraine’s harvest by 2 million tons to 24 million tons. World stockpiles are set to reach 196.38 million tons, up from 192.96 million tons predicted last month, it said.
Low Quality
French soft-wheat exports outside the European Union are forecast to fall to 8 million tons in 2014-15 from 12.2 million tons a year earlier, crop office FranceAgriMer predicts. Of this year’s crop, 46 percent is the lowest grade, mainly suitable for animal feed or producing ethanol, compared with 12 percent in 2013, the crop office said.
Cold, wet weather will further delay this year’s harvest in Canada, and the excess moisture may damage mature wheat, barley and oat, according to Bruce Burnett, a crop and weather specialist at the Canadian Wheat Board.
Corn for December delivery advanced 0.6 percent to $3.43 a bushel after dropping to $3.3575 yesterday, the lowest since June 2010. Prices are set to decrease 3.7 percent this week, the biggest such decline since the period ended July 11.
Soybeans for delivery in November added 0.8 percent to $9.8925 a bushel after touching $9.695 yesterday, the lowest since July 2010. Futures are poised for a 3.2 percent loss this week, the most since the period ended July 11.