Wheat dropped to the lowest since 2010 amid expectations that rising world output will pad global reserves, while soybeans also fell to the lowest in four years.
The UN’s Food & Agriculture Organization lifted its outlook for global wheat production by 9.3 million metric tons to 716.5 million tons today, close to the 2013-14 record. The International Grains Council last month predicted the biggest- ever harvest in 2014-15.
Wheat for December delivery fell 0.6 percent to $5.1675 a bushel on the Chicago Board of Trade before a trading break at 7:45 a.m., after earlier today touching $5.155 a bushel, the lowest for a most-active contract since July 2010. Milling wheat for November delivery traded on Euronext in Paris fell 1 percent to 165.50 euros ($214.27) a ton, and touched the lowest since July 2010.
"Another record world production this year weighs on international wheat prices," the FAO wrote. Grain prices have "been falling continuously since May, largely on excellent crop prospects and abundant supplies of wheat and coarse grains," the agency said.
Wheat futures fell 15 percent in Chicago this year on expectations global production will be the highest ever. The IGC last month predicted world output will reach a record 713.4 million tons as prospects improved for crops in China, Europe and Russia.
The U.S. Department of Agriculture is set to update its supply and demand estimates today. World reserves before the 2015 Northern Hemisphere harvest will top the USDA’s August outlook, a Bloomberg News survey shows.
"The weather in most of the U.S. remains wonderfully grain productive," economist Dennis Gartman wrote in his daily newsletter. "The trends still remain downward and relentlessly so."
The USDA’s crop update is due at 12 p.m. in Washington. World stockpiles may total 193.74 million tons compared with 192.96 million tons forecast on Aug. 12 by the USDA, according to the Bloomberg survey. The USDA estimated global production at a record 716.09 million tons.
Soybeans for delivery in November fell 0.3 percent to $9.905 a bushel after earlier dropping to $9.8625 a bushel, the lowest for a most-active contract since July 2010. Corn for December delivery fell 0.7 percent to $3.435 a bushel.