June 12 (Bloomberg) -- Wheat futures fell in Chicago to the lowest in four months, extending a decline into a bear market on the outlook for rising global supplies. Soybeans also declined, while corn rebounded from the lowest since February.
World wheat inventories by the end of May will reach 188.6 million metric tons, up from 187.4 million forecast last month, on increased output in Russia, China, India and Europe, the U.S. Department of Agriculture said yesterday. The agency also boosted its estimate for domestic reserves, even after cutting the U.S. crop outlook to the lowest in eight years.
“There is more than enough wheat in the world,” Dan Cekander, the director of grain market analysis at Newedge USA LLC in Chicago, said in a telephone interview. “There continues to be downside pressure from the global supply outlook.”
Wheat futures for delivery in July fell 0.7 percent to close at $5.8525 a bushel at 1:15 p.m. on the Chicago Board of Trade, after dropping to $5.84, the lowest for a most-active contract since Feb. 12.
The price settled at $5.8925 yesterday, slumping 20 percent from a 14-month closing high of $7.39 on May 6 and meeting the common definition of a bear market.
Rising grain supplies are helping keep global food costs in check, with the United Nations saying world prices fell in May for the second straight month. The Standard & Poor’s GSCI Agricultural Index of eight crops fell for a sixth straight week through June 6, the longest slump since October 2011.
Corn futures for December delivery gained 0.5 percent to $4.4375 a bushel. Prices earlier touched $4.3875, the lowest for a most-active contract since Feb. 11.
World reserves before the 2015 harvest may climb 8 percent to 182.6 million tons, the fourth straight annual increase, the USDA said. The agency increased it estimate for world production by 0.2 percent from a month earlier.
Soybean futures for November delivery dropped 0.7 percent to $12.1225 a bushel. Global inventories of the oilseed will jump 23 percent to a record 82.88 million tons before the start of the 2015 harvest, the USDA said yesterday.