Grains: Wheat Futures Drop on Crop Forecast, Corn Gains

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Grains: Wheat Futures Drop on Crop Forecast, Corn Gains

The prices of wheat dropped for the third session in a row on speculation that production will surpass projections in the US, the leading global exporter. Anxiety that shipments from Black Sea region will be obstructed eased.

The US may produce 2.015 billion bushels, more than 1.992 million estimated by the Department of Agriculture last month, data from Bloomberg showed. Ukraine said it was close to enclose separatist strongholds as the US and NATO cautioned Russia against any move to send in its army to back the rebels, Bloomberg reported.

Analysts from Morgan Stanley led by Adam Longson said in a report that they expected wheat prices to continue declining given the lack of geopolitical disruptions, as the outlook for the crop improves.

Wheat futures for September delivery dropped 0.2% to $5.48 per bushel as of 11:25 am on the Chicago Board of Trade. The price sank 3.3% in the prior two sessions.

US government projections show that Russia and Ukraine will produce almost a third of global shipments in the 12 months that started July 1. Through Aug. 8, futures dropped 16% in the past 12 months on anticipation that world stockpiles will surge to a three-year high.

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“Concerns of supply disruptions in the Black Sea have proven unfounded to date,” Stanley is quoted by Bloomberg as saying.

Corn futures for December settlement ascended 1% to $3.6725 per bushel. The price tumbled 2.9% in the prior two sessions.

Soybean futures for November delivery slid 0.7% to $10.7675 per bushel.

According to Reuters, Jim Gerlach of Fowler, Indiana-based A/C Trading said that the USDA is likely to announce conservative estimates for soybeans on Tuesday, compared to trade projections, which jumped drastically before expiry on tight old-crop inventories.

“You can’t tell much about a soybean plant (during) thefirst week of August,” Gerlach said.

To contact the reporter of this story; Jonathan Millet at john@forexminute.com