U.S. wheat drops to 1-week low after USDA raises supply forecast

Investing.com - U.S. wheat futures extended sharp losses from the previous session on Thursday to hit a one-week low after the U.S. Department of Agriculture raised its outlook for domestic and global wheat supplies.

On the Chicago Mercantile Exchange, US wheat for July delivery hit an intraday low of $5.0813 a bushel, the weakest level since June 4, before trading at $5.0913 during U.S. morning hours, down 3.88 cents, or 0.76%.

A day earlier, wheat prices hit a two-month high of $5.3740 before turning lower to close at $5.1340, down 18.6 cents, or 3.52%.

The USDA forecast domestic wheat output will total 2.121 billion bushels in the 2015-16 season, above market expectations of 2.096 billion.

Domestic wheat reserves in the season ending next May will total 814 million bushels, compared to forecasts of 791 million.

According to the USDA, global ending wheat inventories next season will rise to 202.4 million metric tons from an estimated 200.4 million tons in 2014-15.

Meanwhile, US corn for July delivery inched down 1.0 cent, or 0.28%, to trade at $3.5700 a bushel after touching a low of $3.5663, a level not seen since June 2.

On Wednesday, corn prices lost 7.6 cents, or 2.12%, to end at $3.5720 after the USDA said that U.S. corn inventories at the end of the 2014-15 season in August will total 1.876 billion bushels, above market expectations for 1.858 billion.

The agency also projected global ending corn stockpiles at the end of the 2015-16 season at 195.2 million metric tons.

Elsewhere on the Chicago Board of Trade, US soybeans for July delivery dipped 0.28 cents, or 0.03%, to trade at $9.4913 a bushel. Prices of the oilseed rose to $9.5760 on Wednesday, the strongest since May 18, before settling at $9.4940, down 2.0 cents, or 0.21%.

The U.S. Department of Agriculture said that domestic soybean stocks at the end of the 2015-16 season will total 475 million bushels, up from estimated inventories of 330 million bushels in the previous marketing season.

According to the agency, global soybean ending stocks at the end of the 2015-16 season will rise to 93.2 million metric tons from 83.7 million in 2014-15.

Corn is the biggest U.S. crop, followed by soybeans, government figures show. Wheat was fourth, behind hay.