Wheat Futures Fall on Stronger Dollar, Improved Outlook for Kansas Crop

Wheat fell on speculation that a stronger dollar will curb demand for U.S. supplies as favorable weather improves the outlook for the winter crop in Kansas, the country’s largest grower.

The dollar rose as much as 0.7 percent against a basket of six major currencies, halting a three-session slump. About 60 percent of the Kansas crop, now coming out of dormancy, was rated good or excellent on March 7, up from 45 percent a year earlier, Department of Agriculture data show.

“Everything is under a little pressure because we’re seeing the dollar a little higher today,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “Wheat conditions are looking pretty good. It looks like it’s going to come out of dormancy looking nice, with ample moisture.”

Wheat futures for May delivery fell 6 cents, or 1.2 percent, to $4.7925 a bushel on the Chicago Board of Trade. The most-active contract has declined 12 percent this year, partly because of slack demand for U.S. grain and rising global inventories.

The price also dropped after a government report showed U.S. officials inspected 9.17 million bushels (249,487 metric tons) for export in the week ended March 11, down 57 percent from the prior seven days.

U.S. exporters shipped 16.6 million tons from the start of the marketing year on June 1 through March 4, down 21 percent from a year earlier, USDA data show. Stockpiles may total 27.2 million tons by May 31, the most since 1988, the government said last week. About 196.8 million tons will be in storage globally, up 19 percent from the previous year, according to the USDA.

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government figures show.

By Tony C. Dreibus
Source: Bloomberg