Wheat futures for December delivery declined 2.1% to $6.43 a bushel yesterday after a US report from the Department of Agriculture showed that world inventories may increase to 202.6 million metric tons, which was more than forecast last month, and the highest in ten years.
 
World wheat inventories will be 0.1% larger than forecast a month ago as producers Russia and Eastern Europe boost output to 112.45 million tons this year, almost 2% higher than estimates made last month. Russia, once the world’s second largest exporter, lifted a ban on shipments in July, while Ukraine eased export restrictions as production in both countries rebounded following last year’s drought. The report further added that additional supply is a likely to come from Australia, as output in the country is close to a record high, while India may also harvest an all-time high.
 
Meanwhile domestic supplies in the US will decrease to 828 million bushels, down from 837 million estimated in October as the nation was been affected by heavy rainfall in the early part of the year, which impacted its planting season. Jason Britt, president of brokerage at Central States Commodities, said that wheat prices are still likely to come under further pressure due to the increasing supply in the commodity, amid the increasing global economic concerns which will likely dampen demand. Wheat for December delivery is marginally higher this morning, up 0.31% to $6.45 a bushel after already having fallen 19% this year.