Plains snow sends wheat sledding lower
U.S. wheat futures fell to eight-month lows Monday as a winter storm brought much-needed moisture to parched wheat-growing areas in the U.S. Plains.
March wheat futures declined 15 3/4 cents, or 2.2%, to $6.99 1/4 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat dropped 18 1/4 cents, or 2.4%, to $7.31 1/2 a bushel. MGEX March wheat finished down 15 3/4 cents, or 2%, at $7.87 a bushel.
Heavy snow for the second time in a week is bringing welcomed moisture to dormant wheat crops in drought-plagued areas of the Plains, including Kansas.
"The added moisture is easing concerns about crop losses," said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago.
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Much of the southern Plains winter wheat crop was in poor condition as it entered dormancy late last year, due to drought conditions lingering after a dry summer. Precipitation so far this winter hasn't been enough to substantially ease concerns about dry soil threatening the crops.
"I still think we lost some of the crop in the Plains, but the prospects definitely look better than it did going into dormancy," Mr. McCambridge said.
Market watchers say U.S. wheat production is now less of a worry, leaving traders to focus on export demand for hopes of higher prices.
Export sales have improved on the recent drop in U.S. prices, but the pace of sales and shipments still lags behind the government's forecast for the marketing year that ends May 31, Mr. McCambridge said. "Without a pickup in exports, end users don't have much incentive to step in and boost prices," he added.
Soybean futures settled at a one-week low, weighed down by improved crop weather in Argentina and worries about export demand declining. Over the weekend, Argentina's Soybean Belt received more rainfall than market watchers had expected.
"We know we are going have a big crop coming in from South America, and people are factoring in the risk of global buyers canceling some U.S. sales," said Jack Scoville, vice president at advisory and brokerage Price Futures Group in Chicago.
This factor was highlighted Friday, when the U.S. Department of Agriculture said in a weekly sales report that there had been net sales cancellations of 57,500 metric tons of U.S. soybeans in the latest weeklong period. Such cancellations indicate buyers have reached agreements to purchase soybeans from other countries.
CBOT soybeans for March delivery finished down 10 cents, or 0.7%, at $14.51 1/4 a bushel.
Meanwhile, corn futures ended higher, fueled by firm cash basis levels due to limited U.S. corn stockpiles, and from a fresh export sale announced Monday. CBOT March corn ended down 10 cents, or 0.5%, at $6.93 1/2.
-Owen Fletcher contributed to this article.
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(END) Dow Jones Newswires
February 25, 2013 15:42 ET (20:42 GMT)
DJ UPDATE: Wheat Prices Sink to 8-Month Lows on Improved Crop Weather->copyright
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