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Wheat Futures Prices Continue To Slide After World Ag Supply & Demand Estimates.

Jun 11, 2015

 Wheat futures tumble, after US lifts harvest hopes

 The rally in wheat futures went into reverse as US officials lifted their estimate for the domestic harvest by more than investors had expected, putting some pressure on soybean and corn prices too.

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 http://www.farms.com/news/wasde-projected-u-s-wheat-supplies-for-current-year-raised-this-month-on-larger-winter-wheat-production-93000.aspx

Wheat futures entered late morning trading in Chicago weaker, largely on technical-based selling, after Chicago's July contract failed, for a second session, to break above its 200-day moving average, which it has noted closed above this year.

 However, the price fall accelerated after the US Department of Agriculture, in its monthly Wasde crop report, flagged "improved prospects for the [US] hard red winter wheat crop in the central Plains following the late season rains".

Farm officials acknowledged that "early harvest reports indicate that some areas receiving excessive rainfall have lodging and increased disease pressure".

 However, they raised by 34m bushels, to 2.12m bushels, their estimate for the domestic wheat harvest, taking it nearly 100m bushels above last year's result.

 Although the estimate for feed consumption of wheat for 2015-16 was raised too, the USDA lifted its estimate for domestic stocks by 21m bushels to 814m bushels.

That was a bigger rise than the 5m-increase that the market had expected.

The USDA lowered its forecast for domestic farmgate wheat prices in 2015-16 by $0.10 per bushel to $4.40-5.40 per bushel, representing a decline of up to 27% in values year on year.

And, as an extra setback to wheat bulls, the estimate for world wheat stocks was lowered by less than investors had expected, by some 900,000 tonnes to 202.4m tonnes.

Although forecasts for Russian and Ukrainian inventories were reduced, estimates for stocks in Argentina, as well as the US, were upgraded.

Chicago wheat futures for July stood 3.0% lower at $5.16 ½ a bushel an hour after the report was released.