The U.S. may produce 2.224 billion bushels in the year ending May 31, up 0.3 percent from last year, the government said Oct. 8. Futures surged 9.1 percent on that date after the Department of Agriculture slashed its estimate for U.S. corn production and said global wheat inventories were shrinking.
The USDA report “for wheat wasn’t nearly as bullish as it was for corn,” said William Bayer, a partner at PTI Securities in Chicago. Among corn, soybeans and wheat, the “fundamentals are probably the weakest” for wheat, he said.
Wheat futures for December delivery dropped 10 cents, or 1.4 percent, to settle at $7.0925 a bushel at 1:15 p.m. on the CBOT. That marked the biggest drop since Oct. 1. The most-active contract has soared 48 percent since the end of June after drought hurt crops in Russia and Eastern Europe.
On Oct. 8, wheat futures jumped 60 cents, then the exchange limit, after the USDA said global stockpiles will total 174.66 million metric tons on May 31, down 1.8 percent from the agency’s forecast last month. The department said the U.S. corn crop may be 3.4 percent smaller than last year.
Rain in the Plains
Rain in some winter-wheat growing areas in the U.S. Great Plains may boost soil moisture for crops being planted.
“Southwest Nebraska had very good rain over the weekend,” said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio. Hard-red winter-wheat areas of Kansas and Oklahoma still need rain, along with soft-red regions in Ohio and Indiana, she said.
Parts of Oklahoma and Kansas, the largest winter-wheat producing state, got as much as 0.4 inch (1 centimeter) of rain in the past week, “not enough to end dry conditions,” Mike Tannura, the president of T-Storm Weather LLC in Chicago, said in a report. As much as 30 percent of the U.S. winter-wheat belt is experiencing “abnormally dry conditions,” he said.
Soft-red winter wheat is used to make cookies and cakes. Hard red-winter varieties are used in bread.
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.