Wheat Futures Drop To 3-Year Low As U.S. Inventory Rises

Wheat futures experienced a significant decline after the US Department of Agriculture (USDA) revealed that domestic production and quarterly stockpiles were larger than the numbers analysts had anticipated, Michael Hirtzer reported this for Bloomberg News.

The unexpected forecast was partly influenced by an unforeseen increase in yields for spring varieties due to late-season rains.

The agency raised its estimates for US wheat output, contrary to the expectations of most analysts who had predicted a decrease.

Following the midday report, Chicago futures plunged by more than 6%, settling at their lowest point in three years.

These losses marked the fourth consecutive quarterly decline in wheat prices, which is the longest such downward trend in 14 years, raising hopes for relief from the ongoing food inflation.

The unexpected forecast was partly influenced by an unforeseen increase in yields for spring varieties due to late-season rains.

While the US ranks as the world's fourth-largest wheat exporter, the additional supplies contribute to a scenario of ample global reserves, thanks to robust harvests in Russia and other key producing nations.

In a separate report, Dominic Carey and Keira Wright, also for Bloomberg News, noted that the USDA recorded higher domestic stockpiles of wheat and soybeans as of September 1 than figures traders had expected, while corn inventories fell short of expectations.

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