Wheat futures dip as snow hits
U.S. wheat futures fell to a 7 1/2-month low Thursday as a major winter storm brought much-needed moisture to wheat crops in the Great Plains.
March wheat futures dropped 7 1/4 cents, or 2.3%, at $7.21 1/4 a bushel at the Chicago Board of Trade. Kansas City Board of Trade March wheat dipped 20 cents, or 2.6%, to $7.57 1/4 a bushel. MGEX March wheat finished down 14 1/4 cents, or 1.7%, at $8.06 1/2 a bushel.
Heavy snow fell Thursday in big wheat-growing states such as Kansas and Oklahoma, where analysts have been concerned about the impact of a prolonged drought. Winter wheat, which is planted in the fall and goes dormant in winter, will be harvested in several months.
The storm blasting the nation's midsection, which already has brought a foot of snow to parts of Kansas, Nebraska and Oklahoma, is the first major precipitation for the "hard red" winter-wheat crop that grows in the Great Plains region, said John Kleist, senior analyst with brokerage Ebottrading.com in Lakemoor, Ill.
Wheat prices, which settled at their lowest level since June 22, have been supported for the past few months by worries that drought conditions would sharply reduce winter-wheat output.
"We are seeing traders, who had bet that poor weather conditions would cut crop yield potential, rush to exit those bets," Mr. Kleist said.
Declines in wheat futures were limited by improved export demand for U.S. supplies.
On Thursday morning, the U.S. Department of Agriculture reported export sales of 110,000 metric tons of soft red winter wheat for delivery to unknown destinations. Of the total, 55,000 tons is for delivery during the 2012-13 marketing year that ends May 31. The remaining 55,000 tons is for delivery during the 2013-14 marketing year that begins June 1.
Traders are looking for additional confirmation of export business emerging before pushing prices higher, analysts said. In recent months, export demand for U.S. wheat has generally been weak as supplies from other countries have been cheaper.
Soybean futures closed mixed, with futures for near-term delivery bolstered by concerns that strong demand is draining precariously tight U.S. stockpiles. Some soybean-market watchers think that dryness in Argentina--along with potential shipping delays in Brazil--will push foreign buyers to the U.S. at a time when the U.S. needs to slow demand.
CBOT soybeans for March delivery finished up 5 cents, or 0.3%, at $14.87 3/4 a bushel.
Meanwhile, corn futures ended lower, pressured by weakness in wheat prices and government projections of U.S. corn harvests rebounding in 2013 after the drought plagued crops last year. Corn prices often move in tandemn with wheat because both are used in animal feed.
CBOT March corn ended down 9 3/4 cents, or 1.4%, at $6.90 3/4.
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(END) Dow Jones Newswires
February 21, 2013 15:46 ET (20:46 GMT)
DJ UPDATE: Wheat Futures Slide as Storm Brings Moisture to Great Plains->copyright
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