Wheat Heads for Worst Weekly Run Since 2011 Before USDA Reports

Wheat traded near a six-month low, set for the worst weekly run in more than a year, as investors assessed whether an increase in acreage in the U.S., the largest shipper, will offset yield losses from a drought.

The contract for March delivery traded little changed at $7.45 a bushel on the Chicago Board of Trade at 10:02 a.m. Singapore time, after falling as much as 0.1 percent and gaining 0.3 percent. Futures, which slumped to $7.3975 on Jan. 4, are down 0.3 percent this week for a sixth straight decline, the worst run since October 2011.

Winter-wheat acreage probably climbed to the highest in four years, as prices and crop-insurance guarantees encouraged farmers to boost plantings, according to a Bloomberg survey. Dormant winter-wheat crops are in the worst condition since records began in 1985 because of the drought, according to the government. The U.S. Department of Agriculture will release its supply, demand and acreage reports in Washington today.

“The USDA data batch will be the focus tonight and these reports typically result in significant market volatility,” Luke Mathews, a Sydney-based analyst at Commonwealth Bank of Australia, wrote in a report today.

The USDA may report that quarterly inventories in the U.S. may have risen to 1.68 billion bushels as of Dec. 1, from 1.66 billion a year ago, according to the average estimate of 25 analysts in a separate Bloomberg News survey. Stronger demand will probably cut those stockpiles to 741 million bushels before the 2013 harvest, down from a previous USDA estimate of 754 million, according to another Bloomberg survey.

Egypt, the biggest buyer, purchased 55,000 metric tons of U.S. wheat at a tender yesterday, signaling a 21 percent slump from a four-year high in July made U.S. supplies competitive.

Corn for March delivery declined 0.3 percent to $6.9675 a bushel, while soybeans for delivery in the same month fell 0.2 percent to $13.775 a bushel.

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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