July 2, 2010
 

CBOT wheat futures decline after biggest weekly gain in four months
 

CBOT wheat futures fell, trimming the biggest weekly gain in more than four months, on signs the global economic recovery may be faltering, potentially slowing demand for commodities.

Wheat for September delivery fell as much as 1% to US$4.95 a bushel on the CBOT. It traded at US$4.9725 a bushel at 8:05 a.m. Singapore time, taking the weekly gain to 5.6%, the biggest since February 12.

Reports yesterday (July 1) on US manufacturing, employment and home sales pointed to slower growth in the second half of the year. China's manufacturing growth slowed more than economists forecast in June, adding to signs that the world's fastest-expanding major economy is cooling.

"The global economic recovery is looking increasingly unstable," Commonwealth Bank of Australia said in a report email today (July 2). "US harvest pressure also remains a risk," it said, and wheat prices may keep declining.

US farmers sowed about 13.907 million acres (5.6 million hectares) with spring wheat up 4.8% from last year, the USDA said Wednesday (June 30). That compares with the average estimate of 13.721 million acres in a Bloomberg survey.

The nation's inventory of all wheat varieties totalled 973 million bushels as of June 1, up 48% from 657 million a year earlier, the USDA said. Analysts had expected 940 million

.

Corn for December delivery fell as much as 0.7% to US$3.8175 a bushel on the CBOT. It traded at US$3.8325 a bushel at 8:35 a.m. Singapore time, paring the weekly jump to 6.3%, the biggest since the week ended June 11.

The contract surged 12% in the two days through yesterday (July 1) after the USDA said farmers in the US, the largest grower and exporter, planted less than they intended in March and inventories from last year's record crop were smaller than expected.

November-delivery soy fell as much as 0.3% to US$9.03 a bushel, before trading at US$9.046. The contract is set to drop 0.8% this week, the second straight loss.