Wheat Declines Third Day Before USDA Report as Supply Seen Ample

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GSR-5247Wheat futures dropped for a third day before a U.S. government report today on world supply and demand that is expected to show bigger harvests in Canada and Russia bolstered record global production.

World wheat stocks before this year’s Northern Hemisphere harvest may be 185.3 million metric tons, from 176.1 million tons a year earlier, based on a Bloomberg News survey of analysts. That compares with 185.4 million tons forecast by the U.S. Department of Agriculture last month.

“The expectation is that the world is quite comfortable with stocks at the moment,” said Graydon Chong, an analyst at Rabobank International in Sydney. “Look at the amount of corn and soybeans that are coming onto the market and we’re not going to be short feed. That’s really dragging markets lower.”

Wheat for March delivery fell 0.4 percent to $5.755 a bushel on the Chicago Board of Trade by 6:24 a.m. after earlier touching $5.705. November-delivery milling wheat traded on NYSE Liffe in Paris fell 0.4 percent to 184.25 euros ($251) a ton.

U.S. wheat stockpiles may be 606 million bushels compared with the USDA’s January estimate of 608 million bushels, a separate survey showed.

The USDA said last month that global wheat output will reach a record 712.7 million tons in 2013-14 as harvests in Canada, Russia and Australia climb. Total world grain production will be a record 2.5 billion tons, the United Nations Food & Agriculture Organization said this month.

World corn inventories may be 159.9 million tons compared with the USDA’s January estimate of 160.2 million tons and 133 million tons a year earlier, the Bloomberg survey shows. Soybean stockpiles may total 72.4 million tons compared with the USDA’s forecast of 72.3 million tons.

Corn for March delivery dropped 0.5 percent to $4.42 a bushel, while soybeans for delivery the same month advanced 0.2 percent to $13.335 a bushel.