Wheat Declines as Rains in U.S., Russia Improve Crop Prospects

By Luzi Ann Javier - Apr 4, 2012
BLOOMBERG
Wheat dropped as rains in parts of the U.S., Russia and Ukraine helped improve crop prospects and investor appetite waned after the minutes of a meeting showed the U.S. Federal Reserve may hold off more monetary stimulus.

Wheat for May delivery lost as much as 0.7 percent to $6.5375 a bushel on the Chicago Board of Trade and was at $6.5425 at 3:16 p.m. Singapore time.

Showers in the central and southern plains in the U.S. and the winter-wheat areas in Russia and Ukraine will help maintain soil moisture, aiding crop development, Telvent DTN Inc. said in a report yesterday. Minutes of the March 13 Fed policy meeting showed it was holding off on increasing monetary accommodation unless the U.S. economic expansion falters or prices rise at a rate slower than its 2 percent target.

“U.S. weather conditions are favorable for the wheat crop,” Adam Davis, a commodity trader at Merricks Capital Services Pty., said in an e-mail today. “Risk-off sentiment is also affecting all commodities.”

The U.S. is the largest wheat exporter, followed by Australia and Russia, according to U.S. Department of Agriculture data released March 9.

Corn prices gained a fourth day, the longest winning streak in more than a month, as supply from the last U.S. harvest declined and cold weather threatened planting in the world’s largest grower and exporter.

May-delivery corn rose as much as 0.8 percent to $6.6375 a bushel, before trading at $6.6175. Soybeans for May-delivery were little changed at $14.18 a bushel.

Corn Stockpiles

Inventories (UGRSCNTO) of corn in the U.S. on March 1 dropped from a year earlier to 6.009 billion bushels, the lowest for the date since 2004, the USDA said March 30. The southern part of the Midwest, the largest U.S. growing region, may have cold weather next week, the Telvent DTN report said.

“Cold weather may slow early planting progress,” Merricks Capital’s Davis said. “This would be a concern.”

Nonghyup Feed Inc., South Korea’s biggest buyer of feed grains, purchased 118,000 metric tons of U.S. corn for arrival in September in a tender held yesterday, according to Lee Tae Woong, a deputy general manager at the company’s foreign trade department. The company will conduct another corn tender at 4 p.m. Seoul time today to buy as much as 140,000 tons of the grain, he said.