April 21 (Bloomberg) -- Wheat fell to the lowest level in almost a week on speculation that rains over the weekend may have aided crops threatened by drought in the U.S., the world’s biggest shipper. Corn dropped to a two-week low.
Wheat for July delivery lost as much as 2.2 percent to $6.8375 a bushel on the Chicago Board of Trade, the lowest price for a most-active contract since April 15, and was at $6.8475 by 6:23 a.m. local time. Futures rose 4.6 percent last week, the first such advance this month and the most in five weeks, amid concern that dry conditions will disrupt U.S. supplies.
Rain should build across northwestern areas of the Midwest over the weekend and push into central areas today, according to MDA Information Systems LLC. While showers in the southwestern areas of the Plains wheat belt will improve moisture, they will not significantly ease drought, the Gaithersburg, Maryland-based forecaster said in an April 17 report.
"There were some forecasts for favorable weather over the weekend that could help to boost the crop," Vanessa Tan, an analyst at Phillip Futures Pte in Singapore, said by phone today. "There is also a correction as prices really went up quite a lot based on Ukraine. Even though there were renewed tensions, grains export out of Ukraine has been still very strong, despite what has been going on."
In the 12 months that started July 1, Ukraine shipped more than 8 million tons, Agriculture Minister Ihor Shvayka said April 18. Russia is set to be the fifth-largest wheat shipper this year followed by Ukraine, according to the U.S. Department of Agriculture. Four-way talks in Geneva on the conflict between Ukraine and Russia ended April 17 with an agreement aimed at de- escalating the situation.
Concerns about Ukraine farmers getting the crop out of ground and eventually to the market were having an "exaggeratedly bullish effect" on wheat, according to Dennis Gartman. "We therefore suspect that wheat prices shall falter, perhaps even tumble, if the situation in Ukraine does subside," the Suffolk, Virginia-based economist said in his daily Gartman Letter on April 18.
Corn for July delivery fell 0.8 percent to $4.9675 a bushel. Drier conditions in the central and southern Midwest and Delta will allow planting to progress well, MDA said in its 6 to 10 day forecast.
Soybeans for July delivery dropped 0.5 percent to $14.95 a bushel, after last week’s 3.8 percent gain.
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