Wheat futures are slumping on Monday after the US government warned of ample global wheat supplies in the 2020-2021 marketing season. The agricultural commodity further fell on bullish domestic output and inventory levels, but Chinese imports helped alleviate some of the increased US output. Will wheat prices continue their downward trend in the second half of 2020?

September wheat futures fell $0.0825, or 1.54%, to $5.2575 a bushel at 16:47 GMT on Monday on the Chicago Board of Trade (CBoT). Wheat prices enjoyed 6.5% weekly gain last week, but they are still down more than 6% year-to-date.

The US Department of Agriculture (USDA) recently published its July USDA Foreign Agricultural Service report that alluded to international wheat prices softening in June, which could be the trend over the next several months. The USDA cited expectations of a record high global wheat supply, as well as bigger harvests among some of the largest producers.

Russian prices fell due to favorable conditions, European prices declined amid large inventories, Canadian prices slipped on seasonal pressure, and Australian prices dropped on projections of an immense crop. Argentina bucked the trend, reporting higher prices due to seasonally tightening supplies. However, Bloomberg reports that there are concerns of manipulation in Buenos Aires, and industry observers say that there is a lack of transparency. The left-leaning government, critics warn, could be meddling in grains markets, which is something the ruling party did the last time it was in office a decade ago.

Meanwhile, the USDA also forecast that ending stocks of US wheat will come in at 942 million bushels on May 31, 2021. The projection is 1.8%, or 17 million bushels, higher than its earlier forecast in June. But it is down 10% from 1.044 billion bushels last year.

New customs data found that export inspections of US wheat increased 66% in the week to July 9, beating analysts’ expectations. Most of the inspections occurred because of greater Chinese imports.

In other agricultural commodities, September corn futures tumbled $0.0725, or 2.15%, to $3.30 per pound. September soybean futures plummeted $0.1775, or 1.99%, to $8.73 a bushel. September coffee futures shed 0.30 cents, or 0.3%, to 98.35 cents per pound.