Wheat headed for the biggest weekly drop in more than two years in Chicago after the U.S. unexpectedly raised its global supply estimate. Rice and corn also declined on forecasts for bigger supplies.
Global wheat inventories will total 181.9 million metric tons at the end of the marketing year on May 31, up 2.3 percent from last month’s estimate, the U.S. Department of Agriculture said yesterday. Analysts surveyed by Bloomberg News had forecast stockpiles would decline to 177.56 million tons. Corn and rice inventory estimates also climbed.
“The USDA pointed to inventory stabilization, with small inventory builds for most crops,” Goldman Sachs Group Inc. analyst Damien Courvalin said in a report. “We believe that this stabilization will put a lid on crop prices in the short term. With the market focus shifting to the likely 2011-2012 supply response, we actually see downside risk to crop prices in the near term.”
Wheat for May delivery slid 14 cents, or 1.9 percent, to $7.265 a bushel at 10:06 a.m. London time on the Chicago Board of Trade. The grain is down 13 percent this week, on course for the biggest decline since December 2008.
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Saturday, March 12, 2011
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