Wheat falls to lowest price since 2007
Sunday, 27 September 2009
NEW YORK, Sept. 26 (Bloomberg): Wheat fell to the lowest price in more than two years on expectations that farmers will harvest a record crop in India, the world's second-largest grower.
India will boost production by 2.5 per cent from a record 80.6 million metric tons a year earlier, Agriculture Commissioner N.B. Singh said today. Global supplies may jump 10 per cent to 186.6 million tons in the year that ends on May 31, the US Department of Agriculture estimates. Prices are down 39 per cent in the past year as world output rose and demand slowed.
"There's an awful lot of wheat out there," said William Bayer, a partner at PTI Securities in Chicago. "India seems to have bounced back from its monsoon drought."
Wheat futures for December delivery fell 23.25 cents, or 4.9 per cent, to $4.4975 a bushel on the Chicago Board of Trade, the biggest decline since Aug. 6. For the week, the price dropped 1.6 per cent, the fourth straight weekly loss. Futures earlier touched $4.48, the lowest for a most-active contract since April 2007.
Wheat in India is planted in October and harvested starting in March. Rains since mid-August boosted water levels in reservoirs that were 59 per cent full as of yesterday, up from 57 per cent a week earlier, according to the farm ministry. Drought plagued the country in the months prior to August.
Growers worldwide will collect 663.7 million tons, the second most behind last year's 682.3 million tons, according to the US government. The USDA on Sept. 11 forecast India would produce 80.6 million tons in the year ending May 31, up 2.5 per cent from a year earlier.
As global production and stockpiles rise, demand for US wheat has slumped. Overseas buyers from the start of the marketing year on June 1 through Sept. 17 committed to buy 10.5 million tons from the US, down 36 per cent from the same period a year earlier, USDA data show. Actual shipments fell 41 per cent to 6.2 million tons, the government said.
Wheat is the fourth-biggest US crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, government data show. China is the world's biggest wheat grower and the US is the biggest exporter.
India will boost production by 2.5 per cent from a record 80.6 million metric tons a year earlier, Agriculture Commissioner N.B. Singh said today. Global supplies may jump 10 per cent to 186.6 million tons in the year that ends on May 31, the US Department of Agriculture estimates. Prices are down 39 per cent in the past year as world output rose and demand slowed.
"There's an awful lot of wheat out there," said William Bayer, a partner at PTI Securities in Chicago. "India seems to have bounced back from its monsoon drought."
Wheat futures for December delivery fell 23.25 cents, or 4.9 per cent, to $4.4975 a bushel on the Chicago Board of Trade, the biggest decline since Aug. 6. For the week, the price dropped 1.6 per cent, the fourth straight weekly loss. Futures earlier touched $4.48, the lowest for a most-active contract since April 2007.
Wheat in India is planted in October and harvested starting in March. Rains since mid-August boosted water levels in reservoirs that were 59 per cent full as of yesterday, up from 57 per cent a week earlier, according to the farm ministry. Drought plagued the country in the months prior to August.
Growers worldwide will collect 663.7 million tons, the second most behind last year's 682.3 million tons, according to the US government. The USDA on Sept. 11 forecast India would produce 80.6 million tons in the year ending May 31, up 2.5 per cent from a year earlier.
As global production and stockpiles rise, demand for US wheat has slumped. Overseas buyers from the start of the marketing year on June 1 through Sept. 17 committed to buy 10.5 million tons from the US, down 36 per cent from the same period a year earlier, USDA data show. Actual shipments fell 41 per cent to 6.2 million tons, the government said.
Wheat is the fourth-biggest US crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, government data show. China is the world's biggest wheat grower and the US is the biggest exporter.