Wheat futures fell for a fifth straight day, capping the biggest weekly decline since January, on speculation that rain will improve prospects for crops being planted in Eastern Europe and Russia.
Parts of Ukraine and southern Russia may receive 0.3 inch (0.8 centimeter) of rain tomorrow, and western Kazakhstan may get 0.4 inch, according to AccuWeather Inc. data. Wheat prices surged 40 percent in the third quarter after drought in the region harmed crops, spurring Russia to ban grain exports.
“The dry area over there is getting a lot smaller, but the rain’s coming in real late in the season,” said Jeff McReynolds, the owner of McReynolds Marketing and Investments in Hays, Kansas. “We probably have not heard the last of the threats to the Russian crop, even though they’re getting rain now.”
Wheat futures for December delivery fell 19 cents, or 2.8 percent, to settle at $6.55 a bushel at 1:15 p.m. on the Chicago Board of Trade. Prices dropped 9 percent this week, the biggest decline since the week ended Jan. 15.
Ukraine had “better-than-expected” precipitation last night, according to a report from Drew Lerner, the president of World Weather Inc. in Overland Park, Kansas.
“The forecast continues to offer healing rainfall in the drought areas from eastern Ukraine to Kazakhstan and the lower Volga River Valley this weekend with lingering showers next week,” Lerner wrote.
Cheaper corn prices also may cut demand for wheat from livestock producers, because both grains are used for animal feed, McReynolds said. Corn plunged the 30-cent limit today on the CBOT, and dropped 9.25 cents yesterday, after the Department of Agriculture raised its estimate for U.S. inventories.
Wheat “is mostly a follower right now,” McReynolds said. “If we see more liquidation in corn, wheat can’t help but fall.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show. The U.S. is the largest wheat exporter.
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