Wheat prices fell sharply on Friday as an international crop agency's report reminded traders that world wheat supplies are huge and will likely keep prices under pressure into next year. Corn and soyabean prices were also lower in futures trading at the Chicago Board of Trade, which closed than usual on the day after the Thanksgiving Day holiday. Futures markets in oil, metals, coffee and other commodities were closed in New York and will reopen on Monday.
Chicago wheat futures for December delivery closed 8 cents lower at $2.91-1/4 a bushel on the abundant supply of wheat on the global market. Some months fell to life-of-contract lows.
The International Grains Council, a London-based organisation that monitors global grain trading, on Thursday raised its estimate of 2004/05 world wheat production to a record 618 million metric tons.
That would exceed last year's production of 554 million metric tons by 12 percent and could be just the beginning of further production growth. "Preliminary indications are that the world wheat area may recover further, after declining to a 40-year low in 2003," it said.
Excellent growing weather in Australia, the United States and other major wheat growers led to the abundant production after drought-related production declines last year.
Abundant world wheat supplies should keep prices under pressure for many months to come, traders said. Chicago traders said selling by commodity investment funds led the wheat market lower, but volume was thin with many traders taking a long holiday weekend. January soyabean futures were down 5-1/2 cents at $5.48-1/2 a bushel.
Strong export demand for US soyabeans led that market higher in trading, but prices waned on continued fears that Asian soyabean rust could decimate next year's US soya crop. The fungus, which was recently discovered in southern US soya-growing states, can sharply reduce crop yields and has plagued South American soya growers over the last few years.
Chicago corn futures for December delivery were down 3/4 cent at $1.97 as commodity investment funds sold the market.
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