Bloomberg News

Wheat Falls as Rain in U.S. Boosts Crop Prospects; Corn Drops

February 02, 2012

Feb. 2 (Bloomberg) -- Wheat slid from a four-month high in Chicago as rain predicted in the U.S. boosted prospects for winter crops planted last autumn and now lying dormant. Corn and soybeans dropped.

Heavy rain and snow will fall this week in the central and southern Plains regions in the U.S., boosting prospects for wheat, Telvent DTN said in a report yesterday. Any precipitation would benefit the U.S. crop, according to the report. Wheat reached the highest price since September yesterday, helped by concern about cold weather in Europe.

“The winter remains unusually mild in the U.S., which could have a positive effect on crop growth there, particularly since there has recently been sufficient rainfall in areas of cultivation,” Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, said in a report today. Wheat may have “limited” room to climb further in Chicago, he said.

Wheat for March delivery declined 1.4 percent to $6.645 a bushel by 1:15 p.m. London time on the Chicago Board of Trade. The U.S. is the world’s largest exporter of the grain. Milling wheat for March delivery traded on NYSE Liffe in Paris fell 1.4 percent to 213.75 euros ($280.18) a metric ton after yesterday reaching the highest level since June.

“It’s not unusual to see the market off a little bit when you have a reasonable move overnight,” said Adam Davis, a commodity trader at Merricks Capital Services Pty in Melbourne.

Corn and soybeans declined as rainfall in Argentina may develop on Feb. 4-5, Telvent DTN said. Rain may fall in parts of Brazil in the next eight days, Australia & New Zealand Banking Group Ltd. analysts Paul Deane and Victor Thianpiriya wrote in an e-mailed report today.

Corn for March delivery fell 1 percent to $6.3575 a bushel in Chicago and March-delivery soybeans dropped 0.7 percent to $12.07 a bushel. Both crops retreated for a first day in three.

--With assistance from Luzi Ann Javier in Singapore. Editors: John Deane, Sharon Lindores

To contact the reporters on this story: Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net; Tony C. Dreibus in London at tdreibus@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.


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