Wheat dropped for a third day as concerns eased that trade in the Black Sea region will be disrupted and on speculation U.S. farmers may harvest a larger crop than forecast by the government.
Futures for September delivery fell 1 percent to $5.4375 a bushel by 5:02 a.m. on the Chicago Board of Trade and prices in Paris dropped 1.2 percent. Chicago futures fell 2.2 percent on Aug. 8, the most since July 29, when they reached a four-year low of $5.185.
Wheat rebounded from the July low as the standoff in the Black Sea intensified and excess rain in Europe threatened to diminish grain quality. Russia and Ukraine will account for almost a fifth of global wheat exports this year, the U.S. government estimates. Prices are still 16 percent lower in the past year on expectations global supply will increase.
"In the face of one of the best grain harvests in decades and already-falling grain prices, Russia is unlikely to risk harming its farm sector by limiting exports," Morgan Stanley analysts led by Adam Longson wrote in a report today. "Without geopolitical disruptions, we expect Chicago wheat prices to resume their downward track," spurred by improving U.S. hard red winter and spring wheat prospects, they said.
World stockpiles will rise to a three-year high of 190.81 million metric tons before the 2015 Northern Hemisphere harvest, according to a Bloomberg News survey before the U.S. Department of Agriculture updates its forecast tomorrow. Farmers in the U.S. may harvest 2.015 billion bushels, up from 1.992 billion bushels forecast by the USDA last month, according to a separate survey of as many as 19 analysts and traders.
Corn for December delivery rose 0.1 percent to $3.64 a bushel. Prices dropped 2.1 percent on Aug. 8, the biggest loss since July 18. Soybeans for November delivery dropped 0.2 percent to $10.8225 a bushel.
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