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Wheat May Drop for First Time in Four Days on U.S. Crop Outlook

Wheat may decline for the first time in four days as the winter-wheat crop condition in the U.S. improved, reducing risks of yield losses in the world’s largest shipper. Corn was little changed.

December-delivery wheat slipped as much as 0.3 percent to $6.3675 a bushel on the Chicago Board of Trade before trading at $6.3975 at 11:27 a.m. Singapore time.

About 49 percent of the U.S. winter wheat crop was rated good to excellent in the week to Nov. 6, up from 46 percent a week earlier, and 45 percent a year earlier, the U.S. Department of Agriculture said yesterday.

Prices may decline as investors reduce the risk premium for potential yield losses in the U.S., said Tetsu Emori, a commodity fund manager at Astmax Co. Ltd. in Tokyo. “There’s not much upside to wheat” and the grain will continue to trade at a discount to corn because of higher global supply, he said.

Corn for delivery in December traded little changed at $6.54 a bushel.

Global wheat inventories will reach 202 million metric tons before the 2012 Northern Hemisphere harvest, according to the average estimate of 14 analysts surveyed by Bloomberg News. That compares with the USDA forecast of 202.37 million tons last month. The next USDA outlook is due Nov. 9.

Inventories of corn will probably drop to 122.75 million tons before the 2012 Northern Hemisphere harvest, down from the USDA’s 123.19 million ton estimate last month, and last year’s 129.76 million tons, according to the Bloomberg survey.

Soybeans for delivery in January gained 0.5 percent to $12.075 a bushel. Prices slumped 18 percent through yesterday since Aug. 31, when it traded at this year’s highest level.

“Soybeans are already hitting a bottom,” Emori of Astmax said. “It’s already giving a good buying opportunity to market participants.” The slump in prices may attract China, the world’s largest importer, to start buying again, he said.

China may buy 57 million tons of soybeans in the 2011-2012 season, up from 52 million tons a year earlier, Morgan Stanley forecast last month. That compares with the USDA’s latest estimate of 56.5 million tons.

Prices may rally by December after the U.S. harvest when global supplies start to decline, Emori said. About 92 percent of the U.S. soybean crop was harvested, compared with 87 percent a week earlier and 98 percent a year earlier, the USDA said.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net

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