Wheat futures down for 2nd day as U.S. crop weather improves

Forexpros - Wheat futures were down for a second day on Wednesday, as improving weather conditions in key wheat-growing regions in the U.S. added to the view that world supplies are sufficient to meet global demand.   

On the Chicago Mercantile Exchange, wheat futures for March delivery traded at USD6.2925 a bushel during European morning trade, shedding 0.47%.

It earlier fell by as much as 0.55% to trade at a session low USD6.2912 a bushel.

Wheat prices tumbled nearly 2% on Tuesday, the biggest drop in more than a week amid speculation global supplies of the grain are ample to meet world demand.

Last week, the U.S. Department of Agriculture raised its estimate for global wheat supplies before the 2012 Northern Hemisphere harvest to an all-time high 213.1 million metric tons, 1.5% higher than January’s projection and 6.2% more than last year.

The prior record was set in the 1999-2000 season, when stockpiles reached 210.7 million tons.

Wall Street investment bank Morgan Stanley warned last week that wheat-production estimates for the U.S. in 2012-2013 may be revised higher should improvements in the weather be sustained.

Prices came under pressure Wednesday after agricultural meteorologists said some drought-relieving snowfall was expected in the U.S. Northern Plains spring-wheat region through the end of February, potentially boosting soil moisture reserves ahead of spring planting.

The U.S. is the world’s third largest wheat producer and biggest exporter of the grain

Meanwhile, Russia’s deputy minister of economic development, Andrey Klepach said earlier that his country aims to secure a “foothold” among buyers in Asia, increasing competition for U.S. and Australian supplies.

Russia is a major wheat exporter and competes with the U.S. for business on the global market.

The U.S. has already lost market share to Russia in North Africa and the Middle East and faces competition from record Australian shipments in Asia.

Some profit taking also weighed, as investors readjust positions ahead of the USDA’s annual outlook forum later this week, where it will update its crop forecasts.

Elsewhere on the Chicago Mercantile Exchange, corn for March delivery dropped 0.57% to trade at USD6.2663 a bushel, while soybeans for March delivery traded at USD12.6463 a bushel, slumping 0.5%.