Wheat Extends June Slide as Accelerating Harvest Boosts U.S. Grain Supply
Wheat fell, heading for the biggest monthly slump since 2008, as warm, dry weather allows farmers to accelerate the harvest in the U.S. Great Plains.
About 44 percent of the winter crop was harvested as of yesterday, ahead of the five-year average of 37 percent, the U.S. Department of Agriculture said today after the close of trading in Chicago. Plant quality in Ellis County, Kansas, has been “excellent,” while yields were “variable,” Kansas Wheat, a trade group, reported June 25 on its website. Kansas is the biggest U.S. winter wheat growing state.
“The harvest is going pretty fast because it’s hot and it’s dry,” said Jeff McReynolds, the owner of McReynolds Marketing and Investments in Hays, Kansas. In Oklahoma and Texas, yields “weren’t any better than expected, but they weren’t worse than expected either. Then the harvest moved into Kansas, and you started hearing about better-than-expected yields.”
Wheat futures for September delivery fell 10.25 cents, or 1.6 percent, to settle at $6.5075 a bushel at 1:15 p.m. on the Chicago Board of Trade. The grain has dropped 17 percent in June, heading for the biggest monthly decline since October 2008. Prices are still up 38 percent in the past year.
Futures also fell on speculation that demand will increase for cheaper Russian supplies after the country removes a ban on exports July 1. Russian third-grade milling-wheat prices decreased as much as 9.1 percent to 6,000 rubles ($212) a metric ton in the North Caucasus and Southern federal districts last week, the country’s Grain Producers’ Union said on its website.
“Russia, before they banned exports last year, their objective was to gain as much market share as possible, and their way of doing it was to undercut everyone else’s prices,” McReynolds said. “Now, they’re picking up from where they left off.”
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.
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