Wheat futures fell to a low of four years after the US government forecast increasing inventories and record global production. Corn suffered the largest weekly loss from July as soybeans recovered.
The US Department of Agriculture said that the global wheat production will rise to a record of 719.95 million metric tons. The forecasts were boosted by 0.5% in August due to the bigger crop production in Ukraine and European Union. Stockpiles were projected to climb 5.3% from a year ago. The decline in futures is the longest in the past two months.
According to Bloomberg, R.J O’Brien & Associates vice president of research, Richard Feltes said, “The market is still adjusting to bearish world wheat production updates yesterday with further increases feared on upcoming crop reports.”
December delivery wheat futures dropped 1.4% closing at $5.025 a bushel after reaching $5, the lowest since July 6 2010 for the most active contract. The grain fell for the fifth day in a row, the longest since July. The United States is the top exporter of wheat in the world.
Executive vice president of The Linn Group, Roy Huckabay said, “There’s plenty of cheaper wheat to compete with US supplies, and that will be a drag on US markets.”
Wall Street Journal reported that corn prices dropped 2.1% after US Department of Agriculture projected domestic farmers would harvest 14.395 billion bushels in autumn, up from its 14.032 last month.
December delivery corn futures dropped 0.7% to $3.3385 per bushel and the price reached $3.3575, the lowest since June 2010. The grain had a weekly drop of 4.9%.
November delivery Soybean futures climbed 0.4% to $9.8525 per bushel. Yesterday, the price reached $9.695, the lowest from July 28 2010.
The USDA boosted the forecasts for domestic soybean and corn output to record highs this year.
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