Forecasts for Steady Showers Hit Wheat

(Wall Street Journal) – U.S. grain futures tumbled Monday as favorable weather forecasts weighed on corn and wheat prices, while soybeans gained.

Wheat prices fell to an almost five-year low amid forecasts for continued rain showers in the southern Plains, which are expected to bring much-needed moisture to winter wheat crops there. Ideal planting conditions for spring wheat in the northern Plains also pressured prices, analysts said.

Prices for the grain also were buffeted by world weather which is improving production prospects in rival wheat-producing regions like Europe and Ukraine. Meanwhile, the pace of U.S. exports continues to languish as foreign buyers find cheaper supplies elsewhere in the world.

“You add bearish fundamentals to a bearish chart picture, and who wants to buy wheat,” said Larry Glenn, an analyst at Frontier Ag in Quinter, Kan.

Mr. Glenn noted that given the good weather recently, “the crop size may be getting bigger out here.”

May-dated wheat futures declined 15 ¾ cents, or 3.2%, to $4.70 ¼ a bushel at the Chicago Board of Trade, the lowest closing price since Jun. 30, 2010.

Corn prices declined to a six-month low as hedge-fund managers sold contracts amid anticipation that forecasts for near-perfect weather next week will encourage farmers to speed corn planting across the U.S. Midwest. Though excess rainfall previously delayed sowing of the crop in parts of the Corn Belt, clear skies and warming temperatures now offer an open planting window, with growers expected to make rapid progress by the end of the month, analysts said.

“Perfect planting weather for the next ten days pretty much hammered” corn prices, said Charlie Sernatinger, head of grains trading at ED&F Man Capital Markets, in an afternoon note to clients.

CBOT May corn fell 3 ¾ cents, or 1%, to $3.60 ¾ a bushel, the lowest settlement price since Oct. 24.