Wheat prices fall as global supply ramps up
By Megan Durisin
CHICAGO — Hedge funds got more bearish on wheat as predictions for ample global supplies spurred the largest rout in prices since 2011.
Money managers are holding the biggest bet against wheat prices since mid-February. Global stockpiles will reach a three- year high before the 2015 harvest, as growers increase production from India to Europe, making up for a smaller American crop, the U.S. government forecasts.
Futures tumbled 15 percent this quarter, the most in three years, and entered a bear market this month as farmers across North America accelerated harvesting of winter varieties. Supplies of corn and soybeans are also climbing, and warm weather has boosted growing conditions in the U.S., the world’s biggest grain exporter.
“We’re seeing ample global supplies,” Christopher Narayanan, the head of agricultural research at Societe Generale in New York, said June 27. “The downside risk is greater than upside risk at this point. Barring any kind of summer woes, things look pretty good.”
Wheat prices in Chicago fell 6.1 percent to $5.8925 a bushel this month. The Standard & Poor’s GSCI Agricultural Index of eight crops slumped 7.5 percent, while the broader GSCI index of 24 commodities rose 1.8 percent. The MSCI All-Country World Index of equities gained 1.6 percent, and the Bloomberg Treasury Bond Index slid 0.2 percent. The wheat net-short position, or bets on declines, expanded to 40,436 futures and options in the week ended June 24, U.S. Commodity Futures Trading Commission data show.