Chicago | Reuters — U.S. wheat futures slid to six-week lows on Monday as much-needed rain and snow fell in dry areas of the southern Plains, pushing most-active K.C. hard red winter wheat futures down more than five per cent, traders said.
Corn and soybean futures sagged on fund-driven long liquidation and as weekend rains reached dry areas of Argentina’s soy belt.
Chicago Board of Trade May wheat settled down 17 cents at $4.50-3/4 a bushel while K.C. May wheat was down 29-1/4 cents at $4.70-1/4 after dipping to $4.69-1/2, its lowest level since Jan. 29 (all figures US$).
CBOT May soybeans ended down 27 cents at $10.22-1/2 a bushel as funds pared down big net long positions in soybean and soymeal futures, and May corn fell 7-3/4 cents at $3.75.
Wheat posted the biggest declines on a percentage basis as rain and snow fell in the southern Plains, parts of which have been dry since October. The storm should generate about one inch of liquid precipitation for northern, central and eastern Kansas, the top U.S. wheat state.
The region’s hard red winter wheat is starting to emerge from dormancy and resume spring growth, a phase that ratchets up its need for moisture.
“The pattern is expected to revert dry again behind this system, but for now, the current system provides a million-dollar rain for Kansas, buying the crop some time,” INTL FCStone chief commodities economist Arlan Suderman said in a note to clients.
The sell-off accelerated as funds trimmed their net long position in K.C. wheat futures, which had grown to 25,376 contracts by March 13, the biggest since August, according to U.S. Commodity Futures Trading Commission data.
After the close, the U.S. Department of Agriculture rated 11 per cent of the winter wheat in top state Kansas in good to excellent condition, down from 12 per cent a week earlier. Wheat ratings also declined in Texas.
Corn futures fell on spillover pressure from wheat and long liquidation by commodity funds that, in the week to March 13, had built up their biggest net long in corn since June 2016, according to the CFTC.
Some analysts also cited pressure from rains in crop areas of Argentina. The showers may have arrived too late to significantly bolster drought-hit soybeans, but “it stops the bleeding,” said Tom Fritz, a partner with EFG Group in Chicago.
Last week, the Rosario Grains Exchange slashed its estimate of Argentina’s soybean crop to 40 million tonnes, from 46.5 million previously, following months of dry weather.
— Julie Ingwersen is a commodities correspondent for Reuters in Chicago; additional reporting by Naveen Thukral in Singapore and Sybille de La Hamaide in Paris.