US wheat futures ended more than 1 percent lower on Wednesday as forecasts for beneficial rain and snow in the southern Plains improved crop prospects that have been dimmed by prolonged dry weather in the wheat belt.
Corn ended nearly 1 percent lower as well on profit-taking as widespread rumours of China having bought a large quantity of supplies from the United States went unconfirmed, while soybeans followed the declines in corn and wheat, reversing five straight sessions of gains on profit taking.
Chicago Board of Trade May wheat ended down 8 cents, or 1.1 percent, at $7.14-1/4 after falling early as low as $7.06 on the day. Losses were led by Kansas City Board of Trade nearby wheat, which ended down 15 cents, or 1.8 percent, at $8.30 per bushel.
May corn was off 5-3/4 cents, or 0.8 percent, at $6.81 a bushel and May soybeans closed down 14-1/4 cents, or 1 percent, at $13.51-1/4 a bushel. KCBT hard red winter wheat led the wheat market lower on weather chatter. Hard red winter is the largest US class of wheat and is the type most widely grown in the US Plains and the prospects for beneficial moisture, while not significant, were seen as a key market factor.
"It's not a bunch. They are going to need a lot more than that. But it more rain, more moisture for some of the drier areas," said one KCBT trader. The crop has been struggling this year due to a lack of moisture. But forecasts for beneficial rain and snow this weekend and again April 1 could improve crop prospects, according to Meteorlogix forecaster Mike Palmerino.
Traded volume in CBOT grains and soy complex were relatively low on Wednesday, with corn volume at 204,872 lots the lowest since January 3. Commodity funds were net sellers of 6,000 CBOT corn contracts, 3,000 soybean and 3,000 wheat contracts.
Though fresh fundamentals were largely scarce for the grain markets Wednesday, a change in weather models showed more beneficial moisture possible for western areas of the wheat belt, the areas most drought-stricken. "There is a chance of about 0.10 to 0.50 inch of moisture in that HRW belt from northern Oklahoma northward" over the next few days, Palmerino said.
Wheat production in the US Plains is under close scrutiny this year after crop failures in the Black Sea region last summer and wet weather that reduced the quality of much of Australia's crop.
World wheat output was forecast to rise 3.4 percent to 676 million tonnes in 2011 but global grain supplies are expected to remain tight due to rising demand, the United Nations food agency said.
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