Wheat falls off one-month high on weak demand forecasts

Economies.com
2018-04-16 19:55PM UTC

Wheat futures tumbled over two percent in American trade away from March 13 highs for the fifth straight session even as the dollar index lost ground for the first time in three sessions, following earlier data from the US, the world's second largest wheat exporter, and amid forecasts of rainfall on southern US hills and signs of softening demand. 

 

As of 07:47 GMT, wheat futures due on May 15 tumbled 2.10% to $4.7900 from the opening of $4.8925, while the dollar index shed 0.37% to 89.47 from the opening of 89.80. 

 

Earlier US data showed retail sales rose 0.6% in March, compared to a 0.1% dip in February, and beating expectations of a 0.4% rise, while core sales rose 0.2% in line with expectations. 

 

The Empire State Manufacturing Index slowed down to 15.8 in April from 22.5 in March, missing expectations of 14.9, while business inventories rose 0.6% as expected in February, as the NAHB Housing Market Index inched down to 69 from 70 in March, missing forecasts of 71. 

 

Last Thursday, The US Department of Agriculture reported wheat sales of 120.7 thousand tonnes last week, up 11% from the previous week, while down 46% from the four-week average, with Mexico at the top of the buyers list at 54.4 thousand tonnes, followed by Vietnam at 48.3 thousand tonnes, and Japan at 35.6 thousand, then Malaysia at 15.7 thousand, while Indonesia and unknown buyers cancelled orders of 33.5K and 28.1K respectively. 

 

Otherwise, the USDA recently released its monthly report on supply and demand projections, raising expectations for US wheat inventories in the marketing year of 2017-2018 by 30 million bushels to 1.064 billion bushels, while maintaining wheat prices projections between $4.6 and $4.7 per bushel. 

 

The USDA raised forecasts for global wheat supplies by 3 million tonnes, while expecting another record high for output at 759.8 million tonnes, with growth in supplies expected to surpass consumption growth, while global wheat inventories are expected to rise by 2.3 million tonnes to 271.2 million tonnes. 

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