Wheat futures fell for the second day in a row following higher stockpiles than projected in the US, the leading exporter in the world, with the crop production in the Great Plains expected to take a boost from expected rains. Soy flopped.
The US government reported yesterday that the country’s inventories will be 583 million bushels, volumes that are above last month’s forecast by 4.5% as demand for livestock feed declined. The Plain’s central and southeast regions will experience rain on April 17, which will bring down the volume of hard red winter wheat that’s exposed to moisture stress from the current 55% to 40%.
The US Department of Agriculture also raised its estimates for global inventories of wheat beyond market expectations.
“The forecast is looking wetter to me this morning in key areas. There didn’t seem to be too much that was a game changer or super constructive,” James Bower of Bower Trading told Bloomberg while commenting on the USDA report.
Wheat contracts for delivery in June stood at $6.675 per bushel as of 11:29 am after losing 1.4% on the Chicago-based Board of Trade. The futures lost 1.7% yesterday.
According to Reuters, the USDA estimates global stockpiles of wheat for 2013-2014 to be 186.68 million tones, figures that are above trade estimates. The latest figures were adjusted upwards from March estimates of 183.81 million tonnes.
Soybean was down after gaining above $15 a bushel in the last trading, following estimates of lower US carry over inventories for 2013-14.
The USDA reduced its estimates for the soybean carry over in 2013-14 to 135 million bushels, cutting last month’s figure by 10 million. Markets had anticipated 139 million bushels for the period. If the USDA figure stands by the end of the marketing year on August 31, it will represent a low last witnessed 10 years ago.
To contact the reporter of this story; Jonathan Millet at email@example.com