Wheat falls as investors liquidate
Monday, 19 July 2010
CHICAGO, July 18 (Bloomberg): Wheat fell the most in a week on speculation that investors are liquidating positions after prices jumped to the highest level since November.
Before Friday, wheat surged 24 per cent this month on reports that a drought in Russia, the fourth-biggest exporter of the grain, will curb production. Investors may have sold on concern that rain may fall this weekend in Russia and the European Union, which also has been parched.
"It doesn't need a reason to go lower when it's this overbought," said Jeff McReynolds, the owner of McReynolds Marketing and Investments in Hays, Kansas. Weather markets are brutal Monday. They'll sleep better taking money off the table."
Wheat futures for September delivery fell 9 cents, or 1.5 per cent, to $5.8725 a bushel on the Chicago Board of Trade. Friday's decline was the biggest since July 9. Yesterday, the price touched $5.985 a bushel, the highest level since Nov. 23. Futures gained 9.2 per cent this week.
Growers in Russia harvested 13.9 million metric tonnes of grain as of yesterday, 12 per cent more than a year earlier, as dry weather allowed farmers to work faster, the Agriculture Ministry said. The winter-wheat harvest was 6.8 per cent ahead of last year's, at 9.4 million tonnes, the ministry said.
Wheat is the fourth-biggest US crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.
Before Friday, wheat surged 24 per cent this month on reports that a drought in Russia, the fourth-biggest exporter of the grain, will curb production. Investors may have sold on concern that rain may fall this weekend in Russia and the European Union, which also has been parched.
"It doesn't need a reason to go lower when it's this overbought," said Jeff McReynolds, the owner of McReynolds Marketing and Investments in Hays, Kansas. Weather markets are brutal Monday. They'll sleep better taking money off the table."
Wheat futures for September delivery fell 9 cents, or 1.5 per cent, to $5.8725 a bushel on the Chicago Board of Trade. Friday's decline was the biggest since July 9. Yesterday, the price touched $5.985 a bushel, the highest level since Nov. 23. Futures gained 9.2 per cent this week.
Growers in Russia harvested 13.9 million metric tonnes of grain as of yesterday, 12 per cent more than a year earlier, as dry weather allowed farmers to work faster, the Agriculture Ministry said. The winter-wheat harvest was 6.8 per cent ahead of last year's, at 9.4 million tonnes, the ministry said.
Wheat is the fourth-biggest US crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.