US wheat futures fell for the third straight day on Thursday, dropping 3.4 percent as rain in key growing areas of the US Plains provided some relief for the drought-stressed crop, traders said. Corn futures also fell as farmers in western stretches of the US Corn Belt resumed their planting tasks while soybeans rose on support from strength in the crude oil market.
"We are starting to see planters roll across the Midwest in areas they thought would be delayed possibly a week to 10 days," said Karl Setzer, market analyst with MaxYield Co-operative. "We are starting to see a little bit of leakage of the weather-related risk premiums."
At 10:19 am CDT (1519 GMT), CBOT May wheat was down 26 cents at $7.51 a bushel. Wheat prices have fallen more than 9 percent during three straight days of declines. CBOT May corn was down 8-3/4 cents at $7.43-1/2 a bushel while May soybeans were up 1-1/4 cents at $13.79-1/4 a bushel.
Wheat and corn fell even as the US dollar weakened to a three-year low a day after Federal Reserve Chief Ben Bernanke gave no sign that the central bank was about to tighten monetary policy. A falling dollar is typically bullish for grain markets as investors see commodities as a hedge against inflation but end-of-the month profit taking overwhelmed the dollar's influence, traders said.
US wheat futures faced more pressure as Ukraine's Agriculture Ministry boosted its 2011 grain harvest estimate and forecast a jump in exports. A devastating drought in the Black Sea region during 2010 decimated the crop there and raised the profile of US wheat on the world market.
Traders noted some long liquidation in agricultural commodities as investors exited positions ahead of the benchmark contract's first notice day for deliveries on Friday. Open interest in CBOT corn fell by nearly 30,000 contracts Wednesday, according to preliminary data from the CME Group. Rainfall in the Plains this week boosted confidence about health of the hard red winter wheat crop in Kansas, the top wheat-producing state. The forecast calls for more storms this weekend.
"In terms of weather market it looks like the situation is improving. It is raining in the US, in China and in Germany," a trader said in France. But drought conditions worsened in southern areas of the Plains such as Texas and Oklahoma, causing "massive crop losses," according to a report from a consortium of national climate experts dubbed the Drought Monitor.
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