August 18, 2010

US wheat futures fall as spotlight shifts to ample stockpiles

Wheat fell to the lowest price in two weeks as investors focus on ample stockpiles and rising production in the US, the world's largest exporter of the grain.

US inventories will total 25.9 million tonnes (1.19 billion bushels) on May 31, down 2.2% from a year earlier, according to the USDA last week.

Overseas sales will rise 36% to 32.7 million tonnes. Exports from Russia, the third-biggest shipper, will plunge to 3 million tonnes from 18.5 million a year earlier because of a drought, the USDA said.

Wheat futures for December delivery lost 12.5 cents, or 1.8%, to close at US$6.8375 at 1:15 p.m. on the CBOT. Earlier, the price fell to US$6.8225 a bushel, the lowest level since August 3.

The most-active contract, which dropped 2.8% last week, still is up 3.4% in August as the drought has scorched Russian fields. Wheat reached a 23-month high on August 6, double its 2010 low in early June.

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