By Tony C. Dreibus Dec. 10 (Bloomberg) -- Wheat’s drop below the 200-day moving average may extend its longest slump since September 2008 and spark sales by hedge funds, said Larry Glenn, an analyst at Frontier Ag. The price crossed its 200-day moving average yesterday, and a slip beneath the 50-day moving average is likely to trigger pre-arranged sell orders, Glenn said. Wheat futures have dropped for seven straight sessions, a 9.1 percent slump that left prices at $5.3525 a bushel yesterday on the Chicago Board of Trade. “There’ll be some funds that won’t like that, so they’ll be sellers,” Glenn said by telephone from Quinter, Kansas. “The 50-day moving average is a benchmark.” If prices lose below that level, “the technical guys are going to be selling because things have turned down,” he said. After rallying 29 percent from September through November, wheat has declined partly on speculation that demand for the grain will drop because of increased global production and the high cost of supplies from the U.S. Hedge funds and other large speculators, including commodity index funds, had become less bearish about the prospect for wheat during the past two months as prices rallied. So-called net-short positions, or bets prices would fall, slipped to 1,693 CBOT futures contracts as of Dec. 4, the fewest since June, compared with an almost three-year high of 37,955 contracts on Sept. 11, data from the U.S. Commodity Futures Trading Commission show. To contact the reporter on this story: Tony C. Dreibus in Chicago at Tdreibus@bloomberg.net.

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