Oct. 31 (Bloomberg) -- Wheat futures dropped to a five-week low on speculation that exports will increase from India, the world’s second-largest grower. Corn and soybeans also declined as rains aid crops in South America.
India’s cabinet approved a cut in the minimum price for sales of state reserves to $260 a metric ton from $300, to reduce inventories that are more than double normal needs, Food Minister K.V. Thomas said yesterday. State stockpiles totaled 36.1 million tons at the start of this month. Chicago wheat futures are down 14 percent this year, and the U.S. Department of Agriculture is predicting global output will rise 8.2 percent to a record. The U.S. is the largest exporter.
“With India now back looking to sell wheat, that will take a toll on sales by other exporters, including the U.S.,” Jim Gerlach, president of A/C Trading Co. in Fowler, Indiana, said in a telephone interview. “World wheat supplies will be adequate.”
Wheat futures for delivery in December fell 1.1 percent to close at $6.675 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $6.67, the lowest since Sept. 25. The most-active contract dropped 1.6 percent in October after gaining 3.7 percent last month.
Prices also fell on speculation that rain this week may aid development of crops in the U.S. Great Plains and Midwest before going dormant in December, Gerlach said. The USDA estimates 86 percent of the winter-wheat crop was planted on Oct. 27, and 61 percent was rated in good or excellent condition, up from 40 percent a year earlier.
Corn and soybeans fell on speculation that rain this week in Argentina will help ease drought conditions and accelerate planting, Gerlach said. Wet, warm weather is aiding early crop growth in Brazil, where farmers are planting, he said.
Corn futures for delivery in December slid 0.5 percent to $4.2825 a bushel in Chicago. The grain fell 3 percent this month and earlier today touched $4.27, the lowest since August 2010.
Soybean futures for delivery in January fell 0.8 percent to $12.6625 a bushel on the CBOT, capping a second straight monthly decline.
--With assistance from Phoebe Sedgman in Wellington and Rudy Ruitenberg in Paris. Editors: Steve Stroth, Millie Munshi