News
23.02.2010
Wheat, Corn Drop After UN Forecasts Grain Stockpiles to Climb
Wheat and corn declined after the United Nations’ Food and Agriculture Organization said grain stockpiles worldwide will increase to the highest level in eight years. Soybeans also fell.
Wheat for May delivery lost as much as 0.4 percent to $5.13 a bushel in after-hours electronic trading on the Chicago Board of Trade and was at $5.1375 at 10:11 a.m. Singapore time. May- delivery corn slipped 0.2 percent to $3.82 a bushel, after dropping as much as 0.4 percent.
“You can see there’s no threat to harvests at this time,” Paul McKay, a director at Commodity Broking Services Pty in Sydney, said by phone today. Prices will be under pressure as supplies rise, he said.
Total inventories of cereals including wheat, corn and rice are forecast to rise to 523.1 million metric tons in the 2009- 2010 season, up from a November forecast of 509.1 million tons, the Rome-based FAO said in its crop outlook report. That’s 3 percent higher than last year’s 507.8 million tons.
Wheat production close to the 2008-2009 record will more than compensate for rising usage of the grain, the FAO data shows. Global wheat trade will drop 16 percent to 118 million tons because of bigger harvests in Asian and North African countries, it said. Wheat can be used in place of corn in making animal feeds.
Soybeans for May delivery slid 0.2 percent to $9.6725 a bushel at 10:21 a.m. Singapore time.
Yields in Argentina, the largest soybean producer after the U.S. and Brazil, may be less than expected as rains threaten to cause beans to rot and fungal diseases spread, Eduardo Anchubidart, who heads the crop-forecast division of the Buenos Aires Cereals Exchange, said yesterday.
About a third of Argentina’s 19 million hectares (47 million acres) of soy crops are located in the so-called Soybean Belt, where El Nino has triggered above-average rainfall. Harvesting in the area, which has the highest yields in the country, starts this week and continues through March.
The grain exchange had forecast Argentina’s soybean output to climb to more than 52 million tons this season, the highest level ever. The U.S. Department of Agriculture forecasts the crop at 53 million tons from a drought-hit 32 million in 2009.
“If you’re looking for concern, it’s probably one of them,” Commodity Broking’s McKay said. Still, ”we’re talking a record crop here. It’s going to take a lot of disease problems to impact that.”
Bloomberg
