Wheat futures fell the most in a week on Monday on speculation the U.S. government will predict bigger harvests than in December for some major exporting countries.
The Chicago Board of Trade wheat futures posted the biggest declines on a percentage basis Monday. March wheat was down 23-1/2 cents, or 2.5 percent, at $9.08 per bushel at 1:30 pm EST, while May briefly fell the 30-cent limit.
Analysts said the U.S. Department of Agriculture may increase its forecast for crops in Argentina and Australia because of favorable weather experienced in November and December. Traders at the Chicago Board of Trade are betting on commodity index funds to begin rebalancing Monday or Tuesday, and would buy 4,000 lots of corn per day for four or five days, while selling roughly 6,000 to 7,000 lots each of soy and wheat.
U.S. growers may seed 64 million acres with wheat in the year ending May 31, or 6 percent more than the previous year, Department of Agriculture Chief Economist Keith Collins said in October.
The USDA on Dec. 11 estimated farmers in Argentina would produce about 15 million metric tons in the year ending May 31. The U.S. is the biggest exporter of wheat, followed by Canada, Russia, Argentina and Australia, the USDA said.
A rise in wheat costs has caused a food-price inflation in countries like Pakistan and India where governments have curbed exports and stopped cancelled import taxes on wheat. Kellogg Co. and General Mills Inc., the largest U.S. cereal-makers, have increased their prices following the grains higher cost.