Wheat futures slip on improved crop outlook
Wheat futures closed at the lowest price in more than a week after the U.S. Department of Agriculture said in a Monday report that conditions had greatly improved from a year earlier. Corn also declined while soybeans were unchanged.
The U.S. winter wheat crop was 62% good or excellent as of Sunday compared with 33% at the same time a year earlier, according to the USDA. About 63% of the Kansas crop earned top ratings versus 29% last year and Oklahoma wheat was 77% good or excellent, up from 14% in 2012, government data show.
As much as three times the normal amount of rain fell in parts of the southern Great Plains in the past three months, according to the National Weather Service. That boosted soil moisture conditions in parts of Kansas and Oklahoma, the biggest U.S. producers of winter wheat.
"The wheat did go in better than last year," said Dan Manternach, a wheat economist at Doane Advisory Services in St. Louis, Mo. "The crop looks great."
Wheat futures for December delivery fell 6 cents, or 0.9%, to $6.46 1/2 a bushel on the Chicago Board of Trade, the lowest closing price for the front-month contract since Nov. 18.
Money managers were net-short, or bet prices would fall, by 59,018 wheat futures contracts as of Nov. 19, according to the Commodity Futures Trading Commission. If those investors decide to liquidate positions and buy back their contracts because of improving demand for U.S. wheat, the price could jump, Mr. Manternach said.
"We've been pricing in the good conditions for the winter wheat, but from here I think there's more upside potential," he said. "The big drive is what these trading funds are going to do. They could take profits and cover their shorts."
Corn futures dropped as investors who were long the market, or bet prices would rise, sold out of their contracts as Friday is first-notice day, meaning they either sell their paper contracts or take delivery of the grain they bought.
Chicago corn futures for December delivery on the CBOT fell 6 1/4 cents, or 1.5%, to $4.18 1/2 a bushel. Soybean futures for January delivery were unchanged at $13.29 1/4 a bushel on the CBOT.
Soybeans had earlier declined as a mix of rain and sun boost crop prospects in South America. In Brazil, dry weather in the states of Parana and Mato Grosso do Sul will speed what's left of planting and timely showers in Rio Grande do Sul will improve soil moisture for recently seeding crops, forecaster DTN said in a report on Tuesday.
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(END) Dow Jones Newswires
November 26, 2013 15:45 ET (20:45 GMT)
DJ Wheat Drops as U.S. Conditions Improve From 2012 -- Update->copyright