Wheat Future Price Drop as Global Production Rising

Wheat futures price tumbled the most this month and corn fell after the U.S. government boosted its estimates for global stockpiles, signaling increased supplies for makers of food, animal feed and ethanol.

Wheat surged 8.1 percent on speculation that the U.S. might recover lost market share in exports. Wheat touched a three-month high in August, before tumbling 23 percent in September.

Wheat for December delivery dropped 34 cents to $6.2675 a bushel; December corn fell 4.25 cents to $6.4075 a bushel; December oats rose 6 cents to $3.45 a bushel; while November soybeans rose 4 cents to $12.3950 a bushel. Wheat futures for December delivery plunged 5.1 percent to settle at $6.2675 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop since Sept. 30. The price has fallen 21 percent this year.

“Never underestimate wheat supply response of farmers to high prices,” said Sal Gilbertie, the president of Santa Fe, New Mexico-based Teucrium Trading LLC, which this year added exchange-trade products linked to wheat and soybeans. “Global wheat production rose because of the high prices.”

World inventories of wheat before next year’s Northern Hemisphere harvests may total 202.37 million metric tons, the most since 2002, the U.S. Department of Agriculture said today in a report. Global corn reserves were pegged at 123.19 million tons, 4.9 percent higher than a September forecast. Both projections exceeded analysts’ expectations. The USDA also cut its estimates for exports of both commodities.

Wheat prices this year reached the highest since touching records in 2008, as rising demand for meat boosted consumption of grain used in livestock feed, and as refining of grain-based fuels increased. While production of both crops will decline this year in the U.S., the world’s largest exporter, output is growing elsewhere.

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