Wheat fell the most in four weeks after the U.S. government yesterday projected record world stockpiles, easing concerns that food prices will rise and weather damage will cut supply.
Global stockpiles before the 2012 Northern Hemisphere harvest will climb to 213.1 million metric tons, 6.2 percent more than last year, the Department of Agriculture said. World food costs are down 9.9 percent from a record last year, United Nations data show. Wheat prices fell 4.7 percent this week, after jumping 11 percent in the second half of January on concern extremely cold weather would hurt crops in Europe.
Supplies are “more than adequate,” Jon Marcus, the president of Lakefront Futures and Options LLC in Chicago, said in a telephone interview. “You’ll see prices continue to drag, at least in the short run. There’s plenty around, so it’s not a concern.”
Wheat futures for March delivery tumbled 2.5 percent to settle at $6.30 a bushel at 1:15 p.m. on the Chicago Board of Trade, capping the biggest one-day drop since Jan. 12 and the largest weekly decline since December. Earlier, the price touched $6.2825, the lowest since since Jan. 24.
Ukraine has asked grain traders to limit wheat exports after drought and frost damaged winter crops, the country’s Grain Association said. Extreme cold killed 3.5 million hectares of winter grains in Ukraine, Prime Minister Mykola Azarov said in a statement on the government website. Cold weather has threatened crops in recent weeks from Russia to France.
The extent of the damage may not be known until it’s time for Northern Hemisphere winter crops to break dormancy in March and April, said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio.
“The market is focused more on record world carryovers, and we’re going to wait until March to see what the cold snap has done to crops in Europe,” Gartner said in a telephone interview.
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay.