Chicago wheat futures cratered more than 6 per cent on Friday, hitting a three-year low after US government data pegged wheat production above analysts' expectations, reports Reuters.
Soybean futures also closed sharply lower on larger-than-forecast domestic stockpiles, and the drop in both commodities dragged down corn prices.
The US Department of Agriculture (USDA) estimated the nation's now completed wheat harvest at 1.812 billion bushels, 78 million bushels bigger than a previous estimate and significantly above the average analyst forecast of 1.729 billion bushels in a Reuters poll.
Chicago Board of Trade wheat futures Wv1 plummeted 6.4 per cent to $5.41-1/2 a bushel and hit the lowest level since Sept. 28, 2020, on a continuous chart.
It was the sharpest single-day percentage point drop since the middle of March 2022, when global grain markets shook off some of the panic-buying following Russia's invasion of Ukraine.
"The wheat balance sheets aren't nearly as tight as had been indicated," said Karl Setzer, brokerage research lead for Mid-Co Commodities.
Wheat prices had already been under pressure from ample Russian supplies and signals that Ukraine was managing to find export routes despite Russian attacks on port facilities.
In a separate report, the USDA said US wheat stocks as of Sept. 1 stood at 1.780 billion bushels, up slightly from 1.778 billion bushels reported a year earlier and reflecting poor export demand for US supplies.
"It is simply another piece of bad news," Rich Nelson, chief strategist for Allendale, said of the wheat stocks data.
U.S. soybean stocks fell to their lowest in two years, but were larger than analysts expected. CBOT soybean futures SV1 fell 25-1/2 cents to $12.75 a bushel.
"It's still an extremely tight number," said Setzer, "but it gives us much more of a cushion going forward than what we had."
CBOT corn futures followed wheat and soybeans lower, despite USDA data that showed lower than expected corn stockpiles.
Corn fell about 2.4 per cent to $4.76-3/4 a bushel.
