Wheat drops

US spring wheat futures dropped 2.1 percent to a near one-month low on Thursday after the US Agriculture Department raised its planted-acreage forecast and in reaction to weather forecasts that boosted prospects for a large crop this year, traders said.
Chicago Board of Trade soft red winter wheat also fell after USDA projected the largest wheat acreage in three years and said world wheat stocks will swell to a record 213.1 million tonnes by the end of the marketing year. That would be up 6 percent from a year earlier.
"Wheat, we have abundant stocks world-wide," said Dewey Strickler, president of AgWatch Market Advisors. "It is going to be hard for wheat to go much of anywhere." The higher wheat acreage forecast - USDA pegged seedings at 58 million acres, up 3.6 million from a year earlier - raised the prospect of a large crop that would add to already plentiful global supplies.
MGEX March spring wheat ended down 17-1/4 cents at $8.01 a bushel. Prices bottomed on Thursday at $8.00-1/2 a bushel, their lowest since January 25. The benchmark CBOT March soft red winter wheat contract settled 2-3/4 cents lower at $6.41-3/4 a bushel. Soyabean futures rose to a five-month high, helped by a weaker dollar, good export demand and concerns about crop production in Argentina and Brazil. Corn futures ended higher in choppy trading after fluctuating between positive and negative territory throughout the day. Weakness in the wheat market and renewed expectations for large plantings this spring weighed on prices but news that China bought 120,000 tonnes of old-crop US corn was supportive. CBOT March corn finished up 1-1/4 cents at $6.39-1/2 a bushel while March soyabeans rose 4-1/2 cents to $12.76-3/4 a bushel. Soyabean prices peaked at $12.80, their highest on a continuous basis since September 23.
Improving weather conditions in the northern US Plains following months of dryness contributed to the bearish tone hanging over the wheat market. USDA affirmed its baseline projections for corn seedings of 94.0 million acres, the most since 1944, at its annual outlook conference on Thursday morning. A year ago, US farmers planted 91.1 million acres.
The government also projected soyabean acreage at 75 million, unchanged from 2011 but up 1 million acres from the baseline forecast issued earlier this month. The International Grains Council on Thursday raised its forecast for the 2011/12 global wheat crop by 5 million tonnes to a record 695 million tonnes, mostly due to higher estimates for production in Kazakhstan, India and Australia.