Wheat Futures Slide on Russia Competition

(WSJ) – U.S. wheat futures fell after Russia said it won’t put restrictions on grain exports and as favorable weather boosted expectations for the size of the next U.S. crop.

Wheat futures for May delivery settled down 19.75 cents, or 2.9%, at $6.5235 a bushel at the Chicago Board of Trade. May wheat at the Kansas City Board of Trade fell 14 cents to $6.915 a bushel, while May wheat dropped 1575 cents to $8.07 a bushel at the MGEX in Minneapolis. Ample global supplies have kept prices largely flat this year.

Russia’s decision not to restrict grain exports cooled speculation that the nation would adopt duties to curb shipments and boost domestic stockpiles. Deputy Prime Minister Viktor Zubkov in comments posted on a government website said the country’s inventories are big enough to meet domestic needs.

Mr. Zubkov’s remarks pressured U.S. wheat prices on concerns Russia would export more of the grain, increasing competition for U.S. sellers. The U.S. is projected to be the largest exporter of wheat in the current crop year that ends May 31, while Russia is expected to be the world’s third-largest exporter, according to the U.S. Department of Agriculture.

“If Russia’s unfettered in its export ability, that’d be negative” for prices, said Dan Basse, president of AgResource Co., a Chicago commodity forecasting company.

Weekly export data provided further fuel for concerns over world demand for U.S. wheat. Wheat inspected or weighed for export in the week ended March 15 came in at 21 million bushels, down from 31.7 million bushels the prior week, federal officials said.

Futures also sold off on wet weather in the U.S. Great Plains, where winter wheat planted last year is beginning to grow again after its winter dormancy. The rains are boosting the development of the crop, which will be harvested in the spring. The favorable weather is expected to boost yields and expand supplies at a time when analysts say world wheat supplies already are strong.

Traders also were digesting a decision by Japan to change its delivery rules for U.S. wheat following recent cargo delays. Japanese government officials said they are now seeking some U.S. wheat cargoes with fixed dates of arrival. Analysts said any effect on U.S. wheat sales to Japan should be limited as changes in prices for wheat shipped to the Asian nation are likely to be small. Still, Japan is a key market for U.S. wheat growers as one of the world’s largest importers of the grain.

The drop in wheat weighed on corn and soybean futures. CBOT May corn ended down 9.5 cents at $6.635 a bushel, while CBOT May soybeans ended down 7.5 cents at $13.665 a bushel. May soybeans were down from a six-month high for the front-month contract reached at Friday’s close.

—Sameer Mohindru in Singapore contributed to this article.

Write to Owen Fletcher at owen.fletcher@dowjones.com