High stocks numbers send wheat tumbling
While the increased uses of U.S. corn and soybeans were the first headlines revealed in Tuesday's USDA World Agricultural Supply and Demand Estimates (WASDE) report, one figure sticks out to traders and brokers that could have a larger effect on the global grain marketplace than either of the other two: massive world and U.S. wheat supplies.
"Projected U.S. wheat supplies for 2013/14 are raised 10 million bushels this month with higher projected imports. Record production and higher exports for Canada are expected to add to wheat supplies in the United States," according to Tuesday's WASDE report. "Projected ending stocks are raised 10 million bushels. The 2013/14 projected season-average farm price is lowered 10 cents at the midpoint with the range narrowed to $6.65 to $7.15 per bushel as near-record world supplies and increased export competition reduce price prospects for U.S. wheat."
These figures stuck out to Dax Wedemeyer. The broker for U.S. Commodities in West Des Moines, Iowa, says they're likely to cause wheat to slide to contract lows. "If anything was unexpected, it was this increase in global wheat supply," he says of Tuesday's report.