Wheat dropped for a second day, trimming the biggest monthly jump since July 2012, as rain may aid parched crops in the U.S., the top exporter. Corn fell as a government report may show reserves rose to a four-year high.
Showers will help wheat in the the north and east of the U.S. Plains by the middle of the week, while western Kansas may get rain later this week, Commodity Weather Group wrote in a March 28 report. Widespread rain in Australia’s Queensland improved prospects for winter crops, the state’s farmer federation said.
Wheat for May delivery fell 0.9 percent to $6.89 a bushel on the Chicago Board of Trade by 5:01 a.m. Futures have risen 14 percent this month on concern that dry weather in the U.S., Australia and eastern Europe will hurt yields, as well as worries of supply disruption due to tension between Ukraine and Russia.
“Over the past week, prices have oscillated between large gains and losses, with sentiment impacted by changing weather forecasts in the U.S. and Australia,” said Luke Mathews, a commodity strategist at Commonwealth Bank of Australia.
Milling wheat for November delivery traded on NYSE Liffe in Paris dropped 1.1 percent to 200.50 euros ($276.35) a metric ton, climbing 6.4 percent this month.
The U.S. Department of Agriculture will publish its prospective planting report today at noon in Washington, as well as the quarterly stocks report.
“This report has historically yielded an uncommonly high number of limit moves in grains, both higher and lower,” economist Dennis Gartman wrote in his daily letter to investors. “We cannot argue with those who wish to stand completely aside from the market given the historic nature of this report.”
U.S. Inventories
Global wheat production will reach 700 million tons in 2014-2015, more than the 696 million estimated in February, the International Grains Council said March 27.
Corn for May delivery lost 0.5 percent to $4.8975 a bushel, paring its third straight monthly increase to 5.7 percent, on speculation that inventories in the U.S. rose to 7.098 billion bushels on March 1, according to a Bloomberg survey.
Prices are set for the longest run of monthly gains since February 2011 as U.S. exports increased. The USDA report on planting prospects may show corn seeding will be cut as U.S. farmers sow the most acres of soybeans ever, the survey showed.
Soybean futures rose 0.2 percent to $14.3875 a bushel, set for a 1.8 percent gain this month after a 10 percent rise in February. U.S. stockpiles on March 1 probably fell to the lowest level in 10 years for the date, based on the survey.