March 27 (Bloomberg) -- Wheat prices fell to the lowest in three weeks as rain and snow in the U.S. southern Great Plains improved soil moisture, boosting prospects for crops emerging from winter dormancy.
As much as 3 inches (7.6 centimeters) of precipitation fell in the past week in parts of Kansas, the biggest U.S. grower, and in Oklahoma and Texas, National Weather Service data show. Winter crops still have received less than 5 percent of the normal amount of moisture in the past three months, government data show. Wheat prices have dropped 7.8 percent this week.
“They’re getting some good moisture” in the southern Plains, said Vince Ambrose, a trader at MF Global in Chicago. “That’s why prices broke this week.”
Wheat futures for May delivery fell 7.25 cents, or 1.4 percent, to $5.0725 a bushel on the Chicago Board of Trade. The price is down 17 percent this year, partly on increased global production and declining demand for U.S. grain. Futures earlier fell to $5.03, the lowest since March 4.
World Production Outlook
World production of grain including wheat and corn is expected to be 1.725 billion metric tons in the marketing year that starts on July 1, the second-largest harvest on record behind the current marketing year, the International Grains Council said in a report yesterday.
Global wheat production in the current marketing year may total 688 million tons, the IGC said. Wheat collected in the 12 months that will start on July 1 is expected to fall 5.4 percent to 651 million tons, the council said.
Wheat is the fourth-biggest U.S. crop, valued at $16.6 billion in 2008, behind corn, soybeans and hay, government data show. The U.S. is the world’s largest wheat exporter.
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