Wheat at 5-month low as U.S. sees hefty supplies
The U.S. Department of Agriculture raised its estimate for
U.S. 2012/2013 wheat ending stocks to 754 million bushels, or 50 million more than its November estimate, and surpassing market expectations.
The agency also increased its forecast for global wheat
inventories to almost 177 million tonnes, from 174 million in November and well above market projections, following estimates of larger crops from Australia, Canada and China.
The most-traded March wheat contract on the Chicago Board of Trade surrendered modest early gains to hit a session low of $8.09-1/4 a bushel, the weakest since July 3. By 0645 GMT, it was down 1.5 percent at $8.09-1/2.
It was the second day in a row that wheat hit its lowest
since July, having fallen 3.2 percent on Tuesday, when the USDA report was released.
"In the longer term, wheat will stay under pressure due to
the new forecast," said Lynette Tan, an analyst at Phillip
Futures, who sees price support at around $8.
"The slow pace of exports, particularly for hard red winter
wheat, means the U.S. industry will have a larger-than-expected buffer against future production issues," Luke Mathews, analyst at Commonwealth Bank of Australia, said in a note.
"This buffer may prove extremely important given the ongoing drought in the U.S. Great Plains."
Corn and soybeans also edged lower in sympathy
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