2014.09.1203:30:00UTC+00Wheat approaches lowest in four years on growing supply

Wheat continued to fall for the fifth consecutive day to near its lowest value in four years behind increasing global supplies.

Contracts for wheat with a delivery date in December fell to a price per bushel as low as $5.0525 after losing 0.8% today. It was trading at $5.0825 late morning Singapore time a day after it reached the lowest among most active contracts on the Chicago Board of Trade at $5.03. Futures are on track to record a 5% drop this week.

Growing supplies of crops around the world have helped food prices to go down as seen through the United Nation’s food index which fell the lowest in four years during the month of August. Commodity analyst Wayne Gordon from Singapore’s UBS AG says that, “You’ve got more European wheat, which seems to satisfy the market right now, and the Russian wheat crop looks better as well,”

The US Department of Agriculture (USDA) announced yesterday that output and supply levels of wheat around the world will end up larger than what was forecast in August. Based on the USDA’s latest projections, global production may reach a record high 719.95 million metric tons, up from the 716.09 million last month, at the end of the 2014-2015 season. The increase could be attributed to the revised up output estimates for the European Union from 147.87 million tons to 150.97 million and for the Ukrainian harvest of up to 24 million tons.

Futures for corn in December increased by 0.4% to reach a price per bushel of $3.425 after falling to its lowest in more than four years at $3.3575 yesterday. The commodity is set to have its largest weekly drop this week since July 11th at 3.8%.

Soybeans with a delivery date in November likewise added on 0.6% to raise its value to $9.8725 per bushel a day after it touched its lowest price since July 2010 of $9.695. Futures for soybeans are on track to decline this week by 3.4%.