(Wall Street Journal) – U.S. grain futures plunged on a stronger dollar and forecasts for timely rains across the U.S. Midwest and Great Plains that will benefit some crops.
Wheat prices tumbled to a more than two-week low, pressured by wet weather over the weekend that brought advantageous moisture to dry soils in the southern Plains, with forecasts for further rains this week.
Prices for the grain have risen in recent weeks because of concerns that dryness in the Great Plains could hamper the crop. Analysts, however, said fund managers on Monday added to short positions amid an improved outlook for the crop, pushing prices lower. The Plains are home to the nation’s hard red winter wheat crop, which is used to make bread.
Private forecasters said rain would fall in parts of Texas and Oklahoma this week, expanding across much of the southern Plains into the weekend and considerably easing dry conditions there. More rain also is expected in the next 11 to 15 days, forecasters said.
“Wheat got smoked good and proper on weekend rains, forecasts for more of the same and talk of bigger crop sizes,” said Charlie Sernatinger, head of grains trading at ED&F Man Capital Markets, in an afternoon note to clients.
May-dated wheat futures fell 24.25 cents, or 4.6%, to $5.0225 a bushel at the Chicago Board of Trade, the lowest closing price since March 26.
Corn prices slipped to a more than two-month low, buffeted by tumbling wheat prices, reports of steady U.S. planting progress and forecasts for continuing showers in the U.S. Midwest, which will help prepare fields for spring planting.
Analysts said U.S. corn seeding is advancing, even in the southeastern portion of the Corn Belt, which previously had received too much rain, delaying fieldwork there.
CBOT May corn declined 6.5 cents, or 1.7%, to $3.705 a bushel, the lowest settlement price since Feb. 2.
A firmer dollar also weighed on grain prices by making domestic exports less competitive on the world market.
Soybean prices extended their losses, declining to a nearly six-month low due to falling grain prices and ample global supplies. Prices for the oilseeds are struggling as farmers in Brazil and Argentina, the main U.S. rivals for soybean production and export, continue to harvest what is widely expected to be a record crop this year, analysts said.
May soybeans at the CBOT shed 2.75 cents, or 0.3%, to $9.4875, the lowest closing price since Oct. 20.
