The following article is from Bloomberg:
By Whitney McFerron
Wheat fell the most this month on concern that demand for U.S. exports will shrink as Europe’s fiscal woes threaten global growth and as the dollar gains.
Stocks declined around the world and the dollar climbed to a six-week high against a basket of six currencies on speculation that Europe’s debt crisis will spread to Italy. A rising greenback makes U.S. commodities more expensive for importers. About 21.1 million bushels of wheat were inspected for export in the week ended July 7, down 17 percent from a week earlier, the U.S. Department of Agriculture said today.
“The outside markets are playing a role, with equities weaker, the dollar stronger and energies down a bit,” said Frank Cholly Sr., a senior market strategist at Lind-Waldock in Chicago. “There’s concern that the Euro-zone debt crisis is going to spread, and we also saw China’s inflation report over the weekend,” indicating demand may slow, he said.
Wheat futures for September delivery dropped 12 cents, or 1.8 percent, to settle at $6.3925 a bushel at 1:15 p.m. on the Chicago Board of Trade, capping the biggest loss since June 30.
Prices also fell on signs that countries around the world will boost output. The USDA may report tomorrow that U.S. and world wheat inventories before next year’s harvest will be larger than forecast last month, according to a Bloomberg News survey.
“It’s going to be interesting to see what kind of numbers the USDA throws out,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas.
India, the world’s largest grower after China, is considering lifting a four-year prohibition on exports after a record harvest in the past year. Russia, which ended a ban on shipments July 1, may produce as much as 92 million metric tons of grain this year, more than estimated, Moscow-based researcher SovEcon said today.
The U.S. is the world’s leading exporter of wheat. The grain is the nation’s fourth-largest crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.
Source: Bloomberg
Posted by Haylie Shipp
