At the Chicago Board of Trade, benchmark March wheat settled at $8.21-1/2 per bushel, down 27-1/4 cents or 3.2 percent, its biggest daily loss in a month. Front-month December wheat dipped to $8.01-3/4, the lowest spot price since July 11, before settling at $8.05-3/4.
CBOT March corn ended down 2 cents at $7.28 a bushel, while January soyabeans fell 2-3/4 cents to settle at $14.72 a bushel. The grain markets ignored strength in outside markets including crude oil and US equities, focusing instead on fundamental monthly crop data from USDA.
The government raised its forecast for US 2012/13 wheat ending stocks to 754 million bushels, which was at the high end of trade expectations and up from its November estimate of 704 million bushels, reflecting a slow pace of export sales. "Exports are much more important to wheat than to corn or soyabeans. And we are just not selling it," said Bill Gary, president of Commodity Information Systems in Oklahoma City, Oklahoma.
USDA also raised its forecast for 2012/13 global wheat inventories to 176.95 million tonnes, up from 174.18 million in November and above trade estimates that ranged from 170 million to 175.68 million. Traders noted that the USDA raised its forecast for Australia's wheat crop to 22 million tonnes from 21 million in November. It left its forecast for the Argentine wheat harvest unchanged at 11.5 million tonnes, despite heavy rains that have swamped fields there.
"World wheat numbers seem to be more of an increase than people were looking for," said Jack Scoville of the Price Futures Group in Chicago. "They are negative numbers, but we have to question whether they are true," Scoville said. "The Argentine crop, all this rain started just as they were trying to get this crop mature, and we've been hearing lower estimates out of Australia."
Jim Bower, president of Bower Trading in Lafayette, Indiana, said he expected that USDA eventually would lower its estimate of the Argentine wheat crop. "In the final analysis, that needs to come down near 9.5 million to 10 million tonnes. It was too wet for too long, over too big an area to keep that crop unchanged," Bower said.