Plains Rains Slump Midweek Wheat Futures
Wheat fell to the lowest price in three weeks on speculation that rain in eastern parts of the U.S. southern Great Plains will boost crop prospects. Corn and soybeans also declined.
Light rain fell in eastern Kansas overnight, and showers are expected in parts of the region Wednesday, according to private forecaster DTN. Still, the precipitation missed the driest areas of the Plains, including west Texas, the Oklahoma panhandle, and western Kansas, National Weather Service data show.
"After a runup in prices like we've had, this hint of moisture out there is going to weigh on things," said Jason Britt, the president of brokerage Central States Commodities in Kansas City, Missouri. "Do I think the wheat crop is saved? Absolutely not. But when you have the market overextended on dryness concerns -- throw some moisture out there, and you're gonna get a correction."
Chicago Board of Trade wheat futures for May delivery dropped 16 cents, or 2.3%, to $6.69 1/4 a bushel, the lowest closing price for a front-month contract since March 11.
The price also fell on speculation that investors who were long grain, or bet prices would rise, probably sold their contracts and liquidated their positions, Dave Marshall, a farm marketing specialist at commodity broker TCFG Inc. in Nashville, Illinois, said in a report to clients on Wednesday.
Corn declined on speculation prices that reached a seven-month high on Tuesday reduced overseas demand for the grain and curbed interest in futures contracts from speculative investors.
The front-month contract jumped to the highest since August after the Department of Agriculture on Monday forecast lower-than-expected planting in the U.S., the world's biggest exporter of the grain. Much of corn's price gains have come from increased purchases of U.S. supplies. Higher prices may crimp that demand.
Corn futures for May delivery dropped 11 3/4 cents, or 2.3%, to $4.95 3/4 a bushel in Chicago trading.
Soybean futures for May delivery declined 22 1/4 cents, or 1.5%, to $14.62 1/4 a bushel on the CBOT, the first drop in four sessions.
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(END) Dow Jones Newswires
April 02, 2014 15:44 ET (19:44 GMT)
DJ Wheat Drops to Three-Week Low on U.S. Plains Rain -- Update->copyright