Wheat Drops in Chicago on Speculation Bigger Harvests Will Increase Supply
World wheat production will be 0.4 percent higher than a July estimate at 677 million metric tons on better production in the European Union, Russia and China, the International Grains Council said yesterday. The EU estimate was increased 0.5 percent to 137.5 million tons.
“The optimistic estimate for the EU is particularly surprising,” said Carsten Fritsch, a Frankfurt-based analyst at Commerzbank, in a report today. The IGC estimate was “too high.”
Wheat for December delivery dropped 5.5 cents, or 0.7 percent, to $7.8225 a bushel by 10:51 a.m. London time on the Chicago Board of Trade. Milling wheat for November delivery fell 1.50, or 0.7 percent, to 207.25 euros ($299.46) a ton on NYSE Liffe in Paris.
Farm group DBV German Farmers Association said yesterday that production in the country would fall 12 percent on “terrible” weather. French farmers will produce 7 percent less wheat, Fritsch said. France is the EU’s largest grower of the grain, followed by Germany and the U.K.
The quality of the EU crop is deteriorating as rainfall hinders collection, the Home-Grown Cereals Authority said Aug. 15, citing Strategie Grains.
“A distinction has to be made between crop volume and crop quality,” Fritsch said. “Last year, for example, Australia registered a record crop of 26 million tons, but 40 percent of it could not be used for food production.”
Corn for December delivery dropped 0.5 cent, or 0.1 percent, to $7.43 a bushel in Chicago. Soybeans for November delivery fell 3 cents, or 0.2 percent, to $13.8975 a bushel.
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