Wheat Drops to Two-Week Low as Global Supply Outweighs U.S. Woes

Wheat fell to the lowest level in two weeks, poised for the longest run of losses since January, after the U.S. government said global reserves will climb even as dry weather cuts production in the U.S., the top exporter.

The contract for July delivery slumped as much as 3.1 percent to $7 a bushel on the Chicago Board of Trade, the lowest price since April 28, and was at $7.0875 by 10:05 a.m. in Singapore. Futures are heading for a fourth session of declines, the longest such streak since Jan. 10.

Output in the U.S. will drop about 8 percent to 1.963 billion bushels in the year that begins June 1, the U.S. Department of Agriculture said May 9. World production is set to decline to 697.04 million metric tons in 2014-2015 from a record 714 million tons, it said. Global ending stockpiles in 2014-2015 may total 187.42 million tons from 186.53 million tons a year earlier, according to the agency.

“The USDA’s forecast for relatively comfortable global wheat supplies for the year ahead outweighed forecasts for a small U.S. crop,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a note today. The increase in global stockpiles is “a relatively comfortable result,” he said.

U.S. corn reserves on Aug. 31, 2015, will reach 1.726 billion bushels from 1.146 billion forecast this year, the USDA said. U.S. soybean reserves on Aug. 31, 2015, will be 330 million bushels, up from 130 million this year, it said.

Corn for July delivery lost 0.6 percent to $5.0425 a bushel. Soybeans fell 0.2 percent to $14.8475 a bushel.

To contact the reporter on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net

To contact the editors responsible for this story: James Poole at jpoole4@bloomberg.net Ovais Subhani, Jake Lloyd-Smith

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