BLBG:Wheat Drops, Halting Eight-Session Rally, as Demand for U.S. Grain to Slow
Wheat futures fell on speculation that demand will slow from importers and U.S. processors after the longest price rally in four years.
Futures surged 12 percent in the previous eight sessions, the longest rally since October 2007, on speculation dry weather in South America would cut grain supplies. About 13.5 million bushels of U.S. wheat were inspected for export in the week ended Dec. 22, 18 percent less than a week earlier, according to the government. Competition has increased for U.S. suppliers, as countries including Russia and Australia boosted output.
Prices “have gotten into levels that start affecting economics,” Darrell Holaday, the president of Advanced Market Concepts in Wamego, Kansas, said in a telephone interview. “The competitiveness of the product becomes a little hard to justify.”
Wheat futures for March delivery fell 0.9 percent to settle at $6.4525 a bushel at 1:15 p.m. on the Chicago Board of Trade. The most-active contract has dropped 19 percent this year, heading for the biggest annual slump since 2008.
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.
To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
