Wheat falls to three-month low on poor US grain demand

Slack demand for US supplies and rising global stockpiles have resulted in wheat falling to a three-month low.

About 9.4 million tonnes of wheat for export were inspected in the week through January 14, down 24% from the previous week, the USDA said in a report. That was the lowest amount since June 1, when the current marketing year began, the USDA said, noting that world inventories may jump 19% by May 31.

The demand structure is weak and exports are weak with no signs in the near future of picking up, said William Bayer, a PTI Securities partner in Chicago. But open interest seems to be picking up as wheat goes lower, which is a sign of fresh selling, he said.

Wheat futures for March delivery fell 15.25 cents or 3% to US$4.8525 a bushel at 9:58 am on the CBOT, the lowest price since October 12. Before Wednesday (Jan 20), the price sank 7.6% this month, partly on speculation that global inventories will rise.

Wheat is the fourth-largest US crop, valued at US$16.6 billion in 2008, behind corn, soy and hay, government data show.