Wheat Drops for Third Session as U.S. Crop Seen Topping Forecast

Aug 11, 2014 3:22 pm ET

Aug. 11 (Bloomberg) -- Wheat futures fell for the third straight session on speculation that output will top government estimates in the U.S., the world’s top exporter. Concerns eased that shipments from the Black Sea region will be disrupted.

The U.S. may harvest 2.015 billion bushels, more than the 1.992 billion forecast by the Department of Agriculture last month, a Bloomberg News survey showed. Ukraine said it’s nearing the end of its operation to encircle separatist strongholds as the U.S. and NATO warned Russia against any attempt to send in troops to support the rebels.

“Without geopolitical disruptions, we expect Chicago wheat prices to resume their downward track” as prospects for the U.S. crop improve, Morgan Stanley analysts led by Adam Longson said in a report.

Wheat futures for September delivery fell 0.5 percent to close at $5.465 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price dropped 3.3 percent in the previous two sessions.

Russia and Ukraine will account for almost a fifth of global exports in the 12 months that started July 1, U.S. government estimates show. Futures fell 16 percent in the past 12 months on expectations that global inventories will increase to a three-year high.

“Concerns of supply disruptions in the Black Sea have proven unfounded to date,” Morgan Stanley said.

Corn futures for December delivery rose 1.3 percent to $3.6825 a bushel. The price dropped 2.9 percent in the previous two sessions.

In the U.S., 72 percent of the crop probably will be rated in good or excellent condition as of yesterday, the third straight decline, a Bloomberg News survey showed. The nation is the biggest producer and exporter. The government will update its estimates later today.

Soybean futures for November delivery dropped 1.1 percent to $10.7325 a bushel. Soybean-oil futures fell 1.8 percent to 35.21 cents a pound, after touching 35.13 cents, the lowest since October 2009.