TOKYO -- International prices for wheat, corn and other staple grains are falling in anticipation of record harvests in the U.S., Russia and elsewhere.
Chicago's benchmark wheat price has hit $4 per bushel, a 60% decrease compared to its recent high, marked in July 2012. It is also a 10-year low. The price of corn was around $3.20 per bushel, also down 60% from its peak in July 2012. This is a seven-year low. The price of soybeans, meanwhile, has slid 20% over the past three months.
Favorable weather in many parts of the world is the main reason grain prices are tumbling. The U.S. is the largest exporter of corn and soybeans, and its Midwest bread basket has experienced spells of favorable weather. Speculation about a bountiful harvest began spreading there in July.
The U.S. Department of Agriculture expects record wheat, corn and soybean yields this year.
Bumper wheat harvests are also expected in Ukraine and Australia, offsetting poor yields in some parts of Europe, including Germany and France, which have been battered by heavy rains.
Russia could harvest more wheat than it has since the breakup of the Soviet Union, in 1991. The market is expecting a supply glut.
The anticipated bounty is expected to swell inventories.
The USDA said the worldwide inventory-to-shipments ratio is at a 15-year high. It is also assuming that China is stockpiling huge amounts of corn. China is the world's largest consumer of the grain.
There are many views that wheat prices may continue to fall over a long period.
But perhaps not that much. "Wheat prices will not decline significantly," said an analyst at Sumitomo Corp. Global Research. "But there are no bullish factors, either."