Wheat futures fell the most in a week on speculation that earlier gains were exaggerated, because global supplies may be sufficient to meet demand from food companies.
The U.S. Department of Agriculture boosted its estimate for world wheat inventories by 0.7 percent on Jan. 12 from its December forecast and said U.S. farmers increased winter-crop plantings by 9.8 percent. Yesterday, prices capped the biggest two-day rally in five weeks after the agency cut its U.S. corn and soybean production forecasts and said domestic wheat stockpiles would drop.
“Wheat doesn’t have the fundamentals to support it that you see in corn and soybeans,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “Ending stocks in the world increased a little bit in the last USDA report. We don’t have a shortage of wheat out there.”
Wheat futures for March delivery fell 10.25 cents, or 1.3 percent, to settle at $7.7325 a bushel at 1:15 p.m. on the Chicago Board of Trade. In the previous two days, the price gained 3.2 percent, the most since the sessions ended Dec. 6. The commodity was little changed this week.
The most-active contract climbed 47 percent in the past year, as adverse weather from Russia to Australia reduced world supplies.
U.S. exporters sold 175,234 metric tons of wheat in the week ended Jan. 6, or 62 percent less than a week earlier, the Department of Agriculture said yesterday. The U.S. is the world’s largest shipper.
“I don’t think wheat demand is anything to get excited about,” Leffler said. Exports are not “as robust as what the market is indicating,” he said.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.