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Dim outlook for 2012 wheat prices

05/09/2012 @ 6:33am

Wheat prices will continue to fall through 2012 and could hit US$5.00/bushel by the end of the year, down 19% from CBOT July wheat's last price in electronic trading of $6.1350/bushel, then decline further in 2013, Capital Economics says. Wheat prices have been soft recently in response to increased acreage and prospects of good corn and wheat harvests in the U.S., it says, with wheat likely to be in excess supply. Global wheat consumption is likely to fall led by a decline in demand for feed wheat, and while global production will also fall, a global stocks-to-use ratio would rise to 25.0% in 2011-12 its highest point since 2001-02, it says. "The fragile global macroeconomic and financial backdrop simply adds to the downside risks," Capital's commodities economist Muktadir Ur Rahman says. (ray.brindal@dowjones.com)

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May 09, 2012 01:00 ET (05:00 GMT)

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