Wheat Posts Biggest Weekly Drop Since January on Rains in U.S.

Apr 04, 2014 3:20 pm ET

April 4 (Bloomberg) -- Wheat fell, capping the biggest weekly decline since January, on speculation that U.S. crops will get a boost from rain in the next week, easing drought conditions. Corn rose, and soybeans slid.

As much as 0.75 inch (1.9 centimeters) of rain beginning April 6 will bring some relief to dry fields from Oklahoma to Nebraska, World Weather Inc. said in a report today. A second storm from April 11 to April 13 will cover much of the southern Great Plains with as much as 1 inch of rain, the private forecaster said. Wheat climbed 12 percent this year through yesterday as dry, cold weather threatened winter crops.

“There are two rain events in the forecast, and that has changed the sentiment,” Dan Cekander, the director of grain- market research for Newedge USA LLC in Chicago, said in a telephone interview. “This is the best forecast for rain this year.”

Wheat futures for May delivery fell 0.9 percent to close at $6.6975 a bushel at 1:15 p.m. on the Chicago Board of Trade, after touching $6.5875, the lowest since March 12. The grain dropped 3.7 percent this week, the most since Jan. 10.

Prices rose to a 10-month high on March 20 amid U.S. dryness and concern that Russia’s annexation of Ukraine’s Crimean region would boost demand for U.S. supplies, spurring hedge funds to lift bullish bets to the highest since 2012.

“With the Crimea situation removed from front-page headlines and reports of improved weather conditions entering the southern U.S. Plains, fund longs have entered a bout of profit-taking,” David Sheppard, a managing director at Gainsborough, England-based Gleadell Agriculture Ltd., said in an e-mailed note today.

Juan Luciano, president and chief operating officer of Archer-Daniels-Midland Co., said April 1 that the company’s grain operations haven’t been affected by Russia’s annexation of Crimea.

Corn futures for May delivery rose 0.4 percent to $5.0175 a bushel in Chicago, capping a weekly gain of 2 percent.

Soybean futures for delivery in May slid 0.1 percent to $14.7375 a bushel, paring this week’s gain to 2.6 percent.

--With assistance from Ranjeetha Pakiam in Kuala Lumpur.