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Wheat Drops as Global Inventories Swell

May 8, 2014 at 20:06 by Vladimir Vyun

Wheat dropped today on speculations that world inventories continue to rise. Analysts estimated that by the end of this month global stockpiles should swell by 5.8 percent from a year ago to 86.8 million metric tons. The US Department of Agriculture will release its estimate tomorrow.

World output is expected to reach a record despite some problems with supply. Among factors negatively affecting global production are the drought in the United States and the conflict between Ukraine and Russia.

The outlook for bigger inventories may put an end to the recent impressive rally. Still, prices are 21 percent higher compared to the beginning of the year.

July futures for delivery of wheat lost $0.0250 (0.34 percent) to $7.3525 per bushel as of 20:02 GMT on CBoT today.

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