Wheat Falls to One-Month Low as U.S. Supplies Forecast to Climb

Wheat prices fell to a one-month low after the U.S. government said domestic inventories will climb to the highest level since 1988.

Stockpiles in the U.S., the world’s biggest wheat exporter, will total 1.001 billion bushels (27.2 million metric tons) at the end of the marketing year on May 31, up 52 percent from a year earlier, the Department of Agriculture said yesterday.

“The 1 billion bushels is hard to choke down,” said Louise Gartner, the owner of Spectrum Commodities, a broker in Beavercreek, Ohio. “We haven’t had a ‘B’ in front of the ending-stocks number in 22 years. People were saying this market may have some upside potential. It makes it more difficult for them to make the point.”

Wheat futures for May delivery fell 2.75 cents, or 0.6 percent, to $4.7875 a bushel on the Chicago Board of Trade. Earlier, the price touched $4.755, the lowest level since Feb. 5. The most-active contract has dropped 12 percent this year amid rising global supplies.

Global inventories may total 196.8 million tons by May 31, the most since 2002, the USDA said. World growers are expected to produce 678 million tons, second only last year’s 682.7 million tons.

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

By Tony C. Dreibus
Source: Bloomberg