Wheat Tailspin Accelerating Signals 13% Drop on Record Harvests

Wheat’s steepest weekly drop since December may be just the start of a fourth-quarter slump as the biggest harvests on record turn this year into the worst for prices since 1990.

Wheat will decline 13 percent to $4.30 a bushel in Chicago by the end of December, according to Emmanuel Jayet, head of agricultural-commodities research at Societe Generale in Paris. Prices had staged the biggest October rally in at least 50 years, rising 26 percent to $5.7475 on Oct. 23, after rain delayed U.S. planting. Last week’s 9.8 percent drop shows the gains were “overdone,” Jayet said.

Global output rose 12 percent to a record 682.3 million metric tons in the year through May and will total 668.1 million in the current season, the second-most ever, the U.S. Department of Agriculture said Oct. 9. The surplus will likely lower costs for General Mills Inc., the maker of Cheerios cereal, and reduce profit for flour millers including ConAgra Foods Inc. (more)