US wheat and new-crop corn futures sank to their lowest level in nearly nine months on Wednesday as heavy snows eased dryness in key growing areas and boosted production estimates. Optimism for upcoming harvests soared after a storm dumped 5 to 10 inches (13 to 25 cm) of wet snow on the Midwest on Tuesday, the latest round of precipitation following the worst US drought in more than 50 years. Additional moisture is expected to provide more relief to bone-dry soils later this week.
"Every time you turn on the news, you see moisture falling somewhere, so it's hard to be bullish right now," said Jason Roose, an analyst for US Commodities. Chicago Board of Trade March wheat dropped 2.9 percent to $6.76-1/4 a bushel, the lowest close for a nearby contract since June. May wheat, the most actively traded contract, tumbled 3.2 percent to $6.83-3/4 a bushel.
The US hard red winter wheat crop, which is used to make bread, has been stressed by dryness in the Great Plains since it was planted last fall. CBOT May corn slid 2.9 percent to $6.88-1/2 a bushel. December corn, which represents the crop that will be harvested in the fall, dipped 1.4 percent to $5.44-1/4 a bushel. Traders are looking ahead to Friday, when the USDA will update its forecasts for 2012/13 US and global wheat, soybean and corn inventories.
May soybeans were near unchanged at $14.66 a bushel, and May soyoil rose 0.3 percent to 50.26 cents per pound. However, crop forecaster Lanworth raised its forecast for US wheat production by 6 percent due to recent precipitation in the southern and central Plains. "Up until a month ago, the ability to produce wheat this coming spring was in doubt, to put it mildly," said Jack Scoville, vice president of Price Futures Group. "All of a sudden that situation's changed."
Global wheat output also could climb in the coming year due to improved crop prospects for key producers that were hit by severe droughts last year, said Joe Glauber, chief economist for the US Department of Agriculture. Australia, the world's second-largest exporter, on Tuesday forecast wheat production in 2013/14 would rise 13 percent from the previous year, boosted by increased planting and higher yields from better growing conditions.