Wheat Falls Most in a Week as Rain in Russia, Australia May Boost Output
Wheat fell the most in a week on speculation that wet weather will boost crop prospects globally.
Rainfall will be “near normal” in parts of drought- plagued Russia and Ukraine this week, and precipitation in Australia may help plants that have been deprived of moisture, according to Accuweather.com. Wheat futures have dropped 18 percent since reaching a 23-month high on Aug. 6 on speculation that global inventories will help offset smaller crops in Russia and Ukraine.
“There are forecasts for rain in the former Soviet Union, and Australia is supposed to pick some up,” said Jerod Leman, a broker at Wellington Commodities in Carmel, Indiana. “Some forecasts are looking a shade better.”
Wheat futures for December delivery fell 17.75 cents, or 2.4 percent, to close at $7.0775 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest decline since Aug. 16.
The price has gained 7 percent this month on speculation that demand would improve for U.S. grain after Russia banned exports and Ukraine said it was considering limiting shipments.
The U.S. is the world’s largest wheat exporter. Last year, Russia was tied with Canada as the second-biggest, followed by Australia and Ukraine, USDA data show.
Futures also may be slumping as investors sell contracts and liquidate positions after the price reached $8.68 on Aug. 6, Leman said.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.
To contact the reporter on this story: Tony C. Dreibus in Chicago at tdreibus@bloomberg.net.
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