Wheat futures fell the most in two weeks on speculation that demand for the grain used in livestock feed will shrink as corn prices slump.
Corn, also a feed ingredient, dropped for the fourth straight session in Chicago. Wheat prices have jumped 44 percent since the end of June after drought in Russia and Eastern Europe reduced output. Corn surged 49 percent in the same period as U.S. yields declined.
Wheat “pulled back when corn pulled back” today, said Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage in Des Moines, Iowa. Earlier, a gain by the dollar eroded prospects for U.S. grain exports, he said.
Wheat futures for December delivery fell 14.5 cents, or 2.1 percent, to settle at $6.90 a bushel at 1:15 p.m. on the Chicago Board of Trade. That marked the biggest drop since Oct. 1. The commodity declined 2.1 percent last week.
The U.S. may produce 2.224 billion bushels in the year ending May 31, up 0.3 percent from last year, the government said on Oct. 8.
“World fundamentals on wheat are OK at the moment, but the market reacted more on fear,” said Lawrence Kane, a market adviser at Stewart-Peterson Group in Yates City, Illinois.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.
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