Wheat supplies to hurt global prices
Wheat prices look likely to continue falling due to record global supplies, even as China's import volume approaches a nine-year high.
Producing countries in Europe and the Black Sea are projecting bumper harvests. At the same time, unfavorable growing conditions in the world's largest producer and consumer is sending Chinese buyers abroad.
U.S. exports are likely to be 100 million bushels higher in the crop year ending May 31 than previously forecast "reflecting strong sales, particularly to China," the U.S. Department of Agriculture said in a monthly report Thursday.
Yet the prospect of improved weather across the U.S. Farm Belt sent the benchmark September wheat futures contract on the Chicago Board of Trade down 2 cents, or 0.3%, to end Friday at $6.81 a bushel.
"We think the trend for CBOT is down, particularly after Friday's selloff," said a senior official at Nonghyup Feed, South Korea's largest animal feed miller.
The China National Grain & Oils Information Center, or CNGOIC, projects imports this year of 5 million metric tons (183.7 million bushels), 73% more than the year prior, attributing the increase to crop damage at home and low prices abroad. Imports so far in July alone are at 1.32 million tons of U.S. wheat.
USDA data show 5 million tons would be the most since the 6.75 million tons of the year ending May 2005.
Global wheat output is likely to rise 6.8% in calendar year 2013 to a record 704 million tons, the United Nations Food and Agriculture Organization said Thursday. CNGOIC forecasts Chinese output to be unchanged on year at 120.63 million tons.
--Zhoudong Shangguan in Beijing and Andrew Johnson Jr. in Chicago contributed to this article.
Write to Huileng Tan at firstname.lastname@example.org
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(END) Dow Jones Newswires
July 15, 2013 07:55 ET (11:55 GMT)