Wheat fell to the lowest level since June 2012 as weather forecasts indicated little risk of frost damage to crops in the U.S., the biggest exporter, and the Black Sea region, bolstering prospects for a record harvest.
Warmer conditions mean "minimal" winterkill threat in all U.S. wheat areas, while a lack of below-zero Fahrenheit (-17.8 degrees Celsius) cold means the same for all wheat areas in the former Soviet Union, Commodity Weather Group wrote in a forecast today.
"We’re really out of production-risk area," said Michael Pitts, a commodity sales director at National Australia Bank Ltd. "We’re largely near or moving into dormancy for the Northern Hemisphere wheat crops, so for the next six weeks or so there’s really unlikely to be too much that can hurt."
Wheat for March delivery lost 0.6 percent to $6.2475 a bushel on the Chicago Board of Trade by 7:40 a.m. after earlier touching $6.24, the lowest price since June 12, 2012. Futures trading volumes were 27 percent lower than the average for the past 100 days, according to data compiled by Bloomberg. Milling wheat for delivery the same month traded on NYSE Liffe in Paris dropped 0.5 percent to 203.25 euros ($280.13) a metric ton.
The world wheat harvest is projected to climb to a record 699 million tons in the 2014-15 season from 696 million tons this season, the International Grains Council said last week.
The crop in the U.S. central and southern Plains is well established and dormant, with no damaging cold indicated, MDA wrote in a forecast Dec. 13. Warmer weather in Ukraine and the south and west of Russia will favor winter wheat, even as it may melt away some protective snow cover, the forecaster wrote.
Most forecast models for the former Soviet Union indicate increased snowfall in the 11- to 15-day period that would improve protection for wheat, especially in Ukraine, CWG said.
Corn for March delivery fell 0.9 percent to $4.2175 a bushel, and touched $4.21, the lowest level since Dec. 2, amid lingering concern that China will cancel more orders of the grain.
China said Dec. 6 it rejected cargoes totaling 180,000 tons of corn containing a genetically modified variety not yet approved by the country.