Wheat dropped to an eight-month low on speculation that a snowstorm today in the U.S. Great Plains will help ease drought conditions before crops emerge from winter dormancy. Soybeans declined, while corn gained.
Parts of Kansas, Oklahoma and Texas are under a blizzard warning, with some areas set to get as much as 15 inches (38 centimeters) of snow, T-Storm Weather LLC said in a report today. While 91 percent of the central to northern Great Plains was under moderate to exceptional drought as of Feb. 19, according to the U.S. Drought Monitor, the dry conditions are ending with the second storm in a week, T-Storm Weather said.
“Heavy snowfall for the second time in a week is expected to bring much needed moisture to dormant winter-wheat crops in parched growing areas of the Plains,” Jim Gerlach, the president of A/C Trading Co. in Fowler, Indiana, said in a report.
Wheat futures for delivery in May fell 1.9 percent to close at $7.0525 a bushel at 2 p.m. on the Chicago Board of Trade, after touching $7.04, the lowest for a most-active contract since June 25.
Kansas and Oklahoma were last year’s biggest U.S. growers of winter wheat, usually planted in the Plains beginning in September. The crops will emerge from dormancy in the coming month before harvesting starts in June.
Weekend rains in Argentina may aid yield potential for corn and soybeans, while drier weather will advance harvesting in central and northern Brazil, reducing demand for U.S. supplies, Gerlach said.
U.S. corn inventories before the 2014 harvest will triple to the highest since 1988 as output jumps 35 percent to a record following the worst drought in seven decades, the USDA said Feb. 22. Soybean production may rise 13 percent, doubling reserves next year.
Soybean futures for delivery in May declined 0.6 percent to $14.3525 a bushel in Chicago. Corn futures for delivery in May rose 0.2 percent to $6.855 a bushel on the CBOT.
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