US wheat futures dropped to a near three week low on Friday, as forecasts for ample global supplies set the grain on track for a weekly loss of 3.5%.
In addition, Corn also dropped in value, and soybeans were set for their first weekly slide in three weeks.
The most-traded one-month wheat contract on the Chicago Board Of Trade lost 0.5% at $4.96-3/4 a bushel at the time this report was drafted near the trading session low of $4.96-3/4 a bushel – its lowest since May 20. Wheat closed down 1.4% on Thursday.
It was set for a 3.5% plunge for the week, its biggest weekly loss in a month.
Importance of tracking Grain Futures; Farmers around the world want to sell their grain produce at the most profitable price available, so they hedge their produce by the help of investment banks. A grain futures contract is legally designed naturally to make the farmer and other parties involved agree for the delivery of grain in the future at an agreed-upon price. The grain contracts are standardized by a futures exchange as to time quality, quantity, and place of delivery.
Experts explained that the U.S. Agriculture Department’s (USDA) predictions were weighing on wheat.
“The USDA’s crop report has sunk the wheat because it added a hefty amount to their global wheat inventory estimate,” Tobin Gorey, director of agricultural strategy, Commonwealth Bank of Australia told Reuters.
The U.S. Agriculture Department’s fixed wheat ending stocks at 983 million bushels for 2019/20, 5 million higher than May, and 925 million bushels for 2020/21, 16 million higher than May.
The U.S. winter wheat harvest forecast was raised by 11 million to 1.266 billion bushels, Analysts had been expecting a cut.