Soybeans tumbled to a four-month low and wheat fell the most in a month after the U.S. raised its estimates for crop inventory including corn, easing concern over tight supplies following the worst drought since 1956.
Global soybean stockpiles as of May 31 will be 60.02 metric million tons, up 4.3 percent from last month’s forecast, the U.S. Department of Agriculture said today in a report. World wheat reserves at 174.18 million tons were up 0.7 percent from the October projection, topping an average forecast of 171.5 million by 15 analysts surveyed by Bloomberg. The corn estimate was increased 0.6 percent.
The Midwest drought that cut output in the U.S., the world’s biggest exporter of the three crops, sent soybean and corn prices to record highs and wheat to a four-year peak. Surging costs may have damped demand by makers of food, biofuel and livestock feed, said Mark Schultz, the chief analyst at Northstar Commodity Investment Co.
“Given all the rhetoric about the rest of the world running out of food, it appears that supplies are adequate and that high prices may have slowed demand,” Schultz said in a telephone interview from Minneapolis.
Soybean futures for January delivery fell 3 percent to close at $14.5125 a bushel at 2 p.m. on the Chicago Board of Trade. Earlier, the oilseed touched $14.49, the lowest for a most-active contract since July 3. On Sept. 4, the price rose to a record $17.89.
Wheat futures for December delivery dropped 1.7 percent to $8.865 a bushel, the biggest decline since Oct. 12. The price has surged 36 percent this year. On July 23, the grain reached $9.4725, the highest since August 2008.
World grain demand will fall 1.4 percent to 2.273 billion tons from a year earlier, the USDA said. U.S. beef, pork and chicken production will drop 2.2 percent in 2013 to 90.14 billion pounds.
Global food costs slipped in October from a six-month high as prices, the United Nations’ Food & Agriculture Organization said this week.
World soybean output in the 12 months ending Sept. 30 will be 267.6 million tons, up 1.3 percent from the October forecast, the USDA said.
Global wheat production was estimated at 651.43 million tons, down 0.2 percent from October, while consumption was forecast 0.5 percent lower at 675.14 million tons, according to the USDA.
“U.S. and global supplies are larger than people thought,” Don Roose, the president at U.S. Commodities Inc. in West Des Moines, Iowa, said in a telephone interview. “The market should be more comfortable that supplies will be adequate with signs of slowing global demand.”
Corn futures for March delivery fell 0.2 percent to $7.42 a bushel. Earlier, the contract gained as much as 1.9 percent. The grain has dropped 13 percent from a record $8.49 on Aug. 10.
In the U.S., corn is the biggest crop, valued at $76.5 billion in 2011, followed by soybeans at $35.8 billion, government figures show. Wheat is the fourth-largest at $14.4 billion, behind hay.