Wheat fell, capping the biggest weekly slump in 14 months, on speculation that global supplies will be ample as rains ease dry conditions from the Black Sea region to the U.S.
Parts of western Ukraine may get more than an inch (2.5 centimeters) of precipitation today, while storms this weekend may bring about 0.3 inch daily to western areas of Russia, AccuWeather Inc. said. About 9 percent of the U.S. winter-wheat crop was harvested as of May 27, up from a five-year average of 1 percent, the government said on May 29.
“The harvest in the U.S. is going on, and yields are looking a little better than expected,” Matt Ammermann, a Minneapolis-based analyst at INTL FCStone, said in a telephone interview. “That’s adding to the harvest pressure. The Black Sea has been a major focus, and looking at the weather maps, they’re getting a little better.”
Wheat futures for July delivery tumbled 4.9 percent to settle at $6.1225 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop for a most-active contract since Jan. 12. This week, the price plunged 10 percent, most since mid-March 2011.
Areas of the U.S. southern Great Plains, the biggest winter-wheat producing region, may have thundershowers from today to June 3, Telvent DTN said. Growers in Kansas are reporting better-than-forecast yields, Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas, said in a telephone interview.
“Harvest is going to continue to pressure wheat down,” Leffler said. “Farmers are finding very good yields out there. In fact, I’m having a difficult time finding farmers who will complain about their wheat.”
Lower prices may reduce global food costs, which have climbed 1.5 percent this year, according to the United Nations. Wheat dropped 1.6 percent in May, while the Standard & Poor’s GSCI Spot Index of 24 raw materials tumbled 13 percent on concern that Europe’s sagging economy will curb demand for energy, metals and crops.
Wheat production in the U.S., the world’s biggest exporter, may rise 8.5 percent in the 12 months that begin July 1 to 59 million tons the International Grains Council said on May 24.
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.
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