Wheat futures trade close to 5-week low on easing crop fears
On the Chicago Mercantile Exchange, wheat futures for December delivery traded at USD6.1288 a bushel during European morning trade, slumping 0.63%.
It earlier fell by as much as 0.82% to trade at USD6.1138 a bushel, the lowest since November 11, when prices slumped to a five-week low of USD6.0925 a bushel.
The Grain Industry Association of Western Australia said earlier that wheat production in the region was forecast to double from a year earlier to 9.24 million metric tons, more than the 9.12 million tons projected last month.
Meanwhile, industry weather group Telvent DTN said in a report Wednesday that rainfall was expected across major wheat-growing regions in Argentina from this weekend through early next week, helping boost soil moisture and early crop development.
Australia and Argentina are the world's fourth and fifth largest wheat exporters and compete with the U.S. for business on the global market.
Favorable crop prospects in these countries could mean increased demand for U.S. supplies, which is the world's third largest wheat producer and biggest exporter.
Paris-based agribusiness consulting firm Agritel said in a report that, 'U.S. export activity looks complicated in the second part of the campaign with the arrival of Southern Hemisphere origins, adding to availability that is already great due to good harvests in the Black Sea basin.'
U.S. wheat exports are forecast to slump to 26.54 million tons in the 2011-12 season from an estimated 35.1 million tons a year earlier, the U.S. Department of Agriculture said last week in its November global supply and demand report.
Meanwhile, commodity traders continued to eye developments surrounding the euro zone's sovereign debt crisis after Spanish borrowing costs rose to a euro-era high at a Treasury bill auction, while French borrowing costs also rose, fanning fears over contagion to core euro zone economies.
Elsewhere on the Chicago Mercantile Exchange, corn for December delivery fell 0.82% to trade at USD6.3713 a bushel, while soybeans for January delivery edged 0.23% lower to trade at USD11.8463 a bushel.
Later in the day, the USDA was to publish key weekly data on U.S. grain export sales for the week ended November 11.
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