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Wheat futures slump on easing global crop concerns

Wheat futures slump on easing global crop concerns

September 28, 2011 / 02:41 PM IST

Forexpros - Wheat futures weakened on Wednesday, dropping to a two-day low amid easing concerns over global crop conditions, while lingering worries over the sovereign debt crisis in the euro zone added to selling pressure. On the Chicago Mercantile Exchange, wheat futures for December delivery traded at USD6.5438 a bushel during European morning trade, declining 0.47%. It earlier fell by as much as 0.92% to trade at USD6.4700 a bushel, the lowest price since September 26. The International Grains Council, an industry group said in a report Tuesday that global wheat sowings could increase to nearly 225 million hectares in the 2012-13 marketing season beginning in October, the highest since the 1981-82 season. The IGC estimates are 1.5% higher, or nearly 4 million hectares more than the wheat sowed in the previous season, as producers around the world increased plantings of the grain to take advantage of higher prices.The IGC said that wheat sowings in Russia and Ukraine were projected to be slightly higher than last year's levels, although the IGC highlighted that "dry conditions are slowing seeding and germination". Russia, once the world's second largest wheat exporter, let a one-year ban on grain exports expire on July 1 after the worst drought in at least half a century wiped out 37% of its wheat crops in the 2010-11 marketing season.Increased wheat exports from Russia could weigh on demand for U.S. supplies, which is the world's third largest wheat producer and biggest exporter.Some mild profit taking also weighed, following Tuesday's 1.7% jump in wheat prices, as optimism over Europe's sovereign debt rescue plan faded amid lingering concerns over Greece's sovereign debt woes. The Financial Times reported that euro zone countries are divided over the terms of Greece's second bailout package, amid growing concerns that the country's funding needs rose significantly in the past few months. Elsewhere on the Chicago Mercantile Exchange, corn for December delivery fell 0.61% to trade at USD6.4763 a bushel, while soybeans for November delivery shed 0.51% to trade at USD12.5650 a bushel.
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