Wheat futures slumped to a seven-month low as precipitation in the southern Great Plains boosts prospects for plants that are dormant for the winter in the U.S., the world’s biggest grain exporter.
Rain may fall mostly in Oklahoma and Texas in the next seven to 10 days, Telvent DTN in Omaha, Nebraska, said in a report. Precipitation in the eastern Midwest will be normal to above average, the forecaster said.
“We’re getting into the time where what happens in the southern Plains is getting to be more important,” Tomm Pfitzenmaier, a partner at Summit Commodity Brokerage in Des Moines, Iowa, said in a telephone interview. “It makes sense that everybody is watching what’s going on there.”
Wheat futures for March delivery fell 1.2 percent to $7.3275 a bushel at 10:21 a.m. on the Chicago Board of Trade. Earlier, the price touched $7.3025, the lowest for a most-active contract since June 26.
As of yesterday’s settlement, Kansas City Board of Trade futures were 47.25 cents a bushel above the Chicago price.
The premium has tumbled 19 percent this month, partly on speculation that rain will boost the high-protein hard red winter variety traded in Kansas City. Soft red winter wheat is offered on the CBOT.
Wheat is the fourth-largest U.S. crop, valued at $14.4 billion in 2011, behind corn, soybeans and hay, government data show.