Wheat Futures Tumble

By Victoria Sizemore Long, The Kansas City Star, Mo.

May 25–Kansas City and Chicago wheat futures closed sharply lower Wednesday in profit-taking after recent gains.

Chicago corn and soybeans finished slightly lower.

Wheat futures recently rose to a series of new contract highs as well as the highest levels in more than nine years because of concern about this year’s hard red winter wheat crop.

Drought has decimated the crop, and a recent return to hot weather, along with spreading diseases, has further eroded production potential. Concern remains about the crop, but traders said the market was due for a correction after the recent sharp gains.

Meanwhile, spillover pressure came from lower gold and crude oil prices.

Corn futures were pressured partly by an industrywide selloff in all commodities, including gold futures, which were down more than $30 an ounce Wednesday.

Corn was also pressured by generally favorable Midwest crop weather and by bearish acreage data from analytical firm Informa Economics. The company projected this year’s U.S. corn acreage at 79.8 million, above the U.S. Department of Agriculture’s March estimate of 78 million.

Meanwhile, meteorologists forecast rain in corn growing areas the next few days followed by dry conditions this weekend, with above-normal temperatures. Some traders think the warmer weather will be beneficial for the newly planted crop, while others were concerned that high temperatures could hurt emerging plants.

Soybean futures fell in a setback from Tuesday’s rebound and got spillover pressure from the wheat pit. But losses were limited after Informa Economics lowered its expectations for this year’s soybean acreage.

Informa projected soybean acreage this year at 75.3 million acres, down from the Agriculture Department’s March forecast for 76.9 million acres. There was speculation that farmers switched soybean acreage to corn.

To reach Victoria Sizemore Long, call (816) 234-4374 or send e-mail to vlong@kcstar.com .

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