Wheat Drops to 3-Week Low as Rain May Aid U.S. Crops; Corn Falls

Apr 02, 2014 3:20 pm ET

April 2 (Bloomberg) -- Wheat declined to a three-week low as rains forecast for Kansas, Oklahoma and Texas may ease drought conditions for winter crops in the U.S, the world’s biggest exporter. Corn and soybeans fell.

Rain in the central Great Plains in the next two to three days may aid some crops, Commodity Weather Group LLC said in a report today. Kansas and Oklahoma may receive 0.25 inch (0.64 centimeters) to 1 inch in the four-to-seven-day period, with as much or more for eastern Texas, World Ag Weather data show. Wheat prices jumped 16 percent last month as dry, cold weather threatened production.

“The rain will help where the soils are dry and the crop has been developing,” Dave Marshall, a farm-marketing adviser for Toay Commodity Futures Group LLC in Nashville, Illinois, said in a telephone interview. “One rain will not reverse six months of below-average precipitation, but it’s enough for managed funds to liquidate long positions.”

Wheat futures for May delivery fell 2.3 percent to close at $6.6925 a bushel at 1:15 p.m. on the Chicago Board of Trade, after sliding to $6.65, the lowest since March 12.

Money managers increased their wagers on a rally by 52 percent as of March 25 compared with a week earlier, U.S. government data show.

Soybean futures for May delivery fell 1.5 percent to $14.6225 a bushel in Chicago after touching $14.96, the highest for a most-active contract since June 6. The oilseed has climbed 13 percent this year.

Corn futures for May delivery dropped 2.3 percent to $4.9575 a bushel. Prices reached $5.125 yesterday, the highest since July, and entered a bull market on March 31, the day the U.S. government said domestic inventories were smaller than analysts expected.

Weather patterns are beginning to shift across the U.S., signaling increased precipitation and warmer temperatures in the Great Plains and Midwest, while rains may be reduced across southeast growing regions, World Weather Inc. said in a report to clients today. The change may aid winter-wheat crops and enhance planting across the South.

--With assistance from Rudy Ruitenberg in Paris and Phoebe Sedgman in Melbourne.