BLBG:Wheat Falls for Third Day as Commodities Plunge; Corn, Soybean Prices Drop
Wheat fell for a third day in Chicago, extending the biggest drop in five weeks, as commodities and equities plunged on concern a faltering global economy will curb demand. Corn and soybeans slid.
The S&P GSCI Spot Index of raw materials retreated for an eighth day, the longest losing streak since December 2008. The MSCI World Index of shares slumped to the lowest level since November. Figures today may show U.S. employment growth in July was too weak to reduce the country’s 9.2 percent jobless rate.
“Markets seem to be increasing their bets that the U.S. economic recovery indeed turns negative,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said by phone from Sydney today. “As long as this wider risk aversion persists, we think that grain markets are susceptible to further selling pressure.”
Wheat for December delivery dropped 11 cents, or 1.5 percent, to $7.145 a bushel by 11:11 a.m. London time on the Chicago Board of Trade. The grain is little changed for the week after falling 3.3 percent yesterday, the most since June 30, and is down 10 percent this year.
Prices also declined on signs importers favor cheaper Russian wheat, reducing demand for supplies from the U.S., the world’s top exporter. Egypt, the largest global importer, bought 180,000 metric tons from Russia in a tender yesterday at $261.94 and $262.50 a ton. As of July 22, U.S. soft wheat for export traded at $275.30 a ton.
Milling wheat for November delivery traded on NYSE Liffe in Paris slid 3 euros, or 1.5 percent, to 193.75 euros ($274.10) a ton.
Purchases Scrapped
The U.S. reported overseas buyers last week canceled a net 405,598 tons of soybean purchases, the most since 1990. Exports of corn since Sept. 1 are 7.9 percent lower than a year earlier. Both crops retreated for a third day today.
Corn for December delivery declined 12.75 cents, or 1.8 percent, to $6.8875 a bushel in Chicago, paring this week’s gain to 3 percent. The grain has climbed 9.5 percent this year on speculation hot, dry weather that followed excessive rainfall during planting will curb yields.
Soybeans for November delivery fell 16.25 cents, or 1.2 percent, to $13.29 a bushel. The oilseed is down 2.1 percent this week and 5.3 percent this year.
Prices also dropped as the U.S. Dollar Index, a six- currency gauge of the greenback’s strength, headed for its biggest weekly increase since May. A stronger U.S. currency makes crops from the country more expensive in terms of other monies. The index is up 1.5 percent this week.
To contact the reporters on this story: Sungwoo Park in Seoul at spark47@bloomberg.net; Tony C. Dreibus in London at tdreibus@bloomberg.net.
To contact the editors responsible for this story: Richard Dobson at rdobson4@bloomberg.net
