Wheat Prices Fall for Third Day as Demand for U.S. Grain Drops

Wheat fell for a third straight day as demand for U.S. grain slid, eroded by rising global supplies. From June 1 to Nov. 12, overseas buyers committed to purchase 14.3 million metric tons of U.S. wheat, 29 percent less than a year earlier, Department of Agriculture data show. The dollar gained as much as 0.8 percent against a basket of six major currencies, making U.S. exports less appealing.

“If the dollar is stronger, I don’t think wheat can hang in higher,” said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. Investors who buy and sell based on the dollar’s value pushed down prices, he said.

Wheat futures for March delivery fell 3.25 cents, or 0.6 percent, to $5.8075 a bushel on the Chicago Board of Trade. The most-active contract dropped 2.1 percent in the previous two days, paring the third-straight weekly gain to 3.8 percent.

Prices likely will be “subdued” in the next six months because of ample global supplies and slack demand for U.S. wheat, the Commonwealth Bank of Australia said today. Futures may fall below $5 in early 2010, the bank said.

Wheat is the fourth-biggest U.S. crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, USDA data show.

By Tony C. Dreibus
Bloomberg