Wheat Drops for Second Day as Global Supplies Set to Increase
Wheat declined for a second day on speculation supply may increase from Russia and the European Union, and as commodities fell on concern that a levy on bank deposits in Cyprus may deepen Europe’s debt crisis.
The contract for May lost as much as 1.4 percent to $7.1325 a bushel on the Chicago Board of Trade, the biggest intra-day loss since March 6. Futures were at $7.175 at 11:50 a.m. in Singapore with volume more than double the 100-day average.
Russia, the third-largest shipper last year, targets a crop increase to 40 million metric tons to 50 million tons this year from 37.7 million tons a year earlier, the government says. Soft wheat output in the European Union may rise 2.6 percent to 127.77 million tons, Coceral said March 15. Commodities measured by the Standard & Poor’s GSCI Index fell as much as 0.9 percent after Euro finance ministers agreed to force depositors in Cypriot banks to share the cost of a bailout.
“Expectations of higher supply from the EU and Russia are pushing prices lower,” Hiroyuki Kikukawa, general manager for research at Tokyo based Nihon Unicom Inc., said in an e-mail. “The Cyprus problem is also triggering a risk-off attitude across financial markets.”
Soybeans for May delivery lost as much as 1.1 percent to $14.10 a bushel, the cheapest for the most-active contract since Feb. 15, and traded at $14.125. Corn lost 0.7 percent to $7.1175 a bushel. That makes soybeans 1.99 times more expensive than corn, compared with an average of 2.43 times in the past decade.
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