Wheat prices fell from a one-week high after Ukraine reported a surge in grain production, indicating a fall in demand for US supplies.
Ukraine's grain harvest increased 83 percent to 53.6 million tonnes this year, said Volodymyr Klymenko, head of the Ukrainian Grain Association. Wheat futures in Chicago fell 38 percent this year.
Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage said they could not sustain prices with all the problems with demand, and that Ukraine is where all the expansion will take place as that is the only place with good growing conditions.
Wheat futures for March delivery fell 4 cents to US$5.5275 per bushel on the CBOT. The price was US$5.78 yesterday.
Ukraine has exported 10 million tonnes of grain in the year that started July 1, and the country plans to ship the same amount by May 31, 2009, said Klymenko.
The USDA expects Ukraine to export 9 million tonnes of wheat in the fiscal year that started June 1, a sharp increase from 1.24 million tonnes in the previous year.
Importers have committed to buy 20 million tonnes of US wheat since the start of the marketing year, down 27 percent on-year, while exporters have shipped 15.1 million tonnes, down 14 percent on-year, according to USDA data.
Grain-futures volumes have declined due to wide price swings and financial market turmoil, said Pftizenmaier.