Wheat futures fell to a three-week low on speculation that yields may be better than expected in the southern Great Plains of the U.S. as farmers step up the harvest of crops planted last year.
About 10 percent of the winter-wheat crop was harvested as of June 5, more than the 6 percent average in the previous five years, the U.S. Department of Agriculture said yesterday. Central Kansas hasn’t been as dry as areas further south and west, boosting prospects for output, said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas.
“The yields in northern Oklahoma and central Kansas are coming in better than anticipated, and I think that’s spooking the market a little bit,” Holaday said “Central Kansas continues to show some promise. The southwest will be as bad as everybody thought, maybe worse, but you can add a lot of bushels in other parts of the state.”
Wheat futures for July delivery dropped 10.25 cents, or 1.4 percent, to settle at $7.3375 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $7.3125, the lowest for a most-active contract since May 16. The grain has jumped 70 percent in the past year as adverse weather threatened production in the U.S., Europe and China.
On the Kansas City Board of Trade, wheat futures for July delivery dropped 15.5 cents, or 1.7 percent, to $8.745 a bushel. Yesterday, the price declined 2.7 percent. The commodity has surged 89 percent in the past 12 months.
Winter wheat is planted in the Great Plains and Midwest starting in September, goes dormant until March and is typically harvested beginning in June.
In Kansas, the largest U.S. grower behind North Dakota, 11 percent of crops were mature, ahead of the five-year average of 6 percent, the USDA said yesterday. Parts of southern and western Kansas had less than half of the normal amount of rain in the past 60 days, according to the National Weather Service.
Farmers in south-central Kansas have begun “one of the earliest wheat harvests in recent memory,” Kansas Wheat, a trade group, said in a statement yesterday. Crops near the Oklahoma border in Kiowa, Kansas, were reported “better than expected,” the Manhattan, Kansas-based organization said.
“Harvest usually pressures the market this time of year,” said Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas. “In the southern part of Kansas, they’re starting to get the combines rolling.”
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government figures show.