BLBG:Wheat Extends Longest Slump Since October as Rain May Revive Dry U.S. Crop
Wheat fell, capping the longest slump in 11 months, on signs that rain this week will improve conditions of dry fields in the U.S. Great Plains just as farmers begin planting winter crops.
Storms may bring a half inch (1.3 centimeters) to an inch of rain to parts of Kansas, Oklahoma, Colorado and Texas by Sept. 16, said Mike Tannura, the president of forecaster T-Storm Weather LLC in Chicago. After months of below-normal rainfall, conditions in the region range from “abnormally dry” to “exceptional” drought, the most severe ranking on the University of Nebraska at Lincoln’s U.S. Drought Monitor.
The rain “will be welcomed,” Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas, said in a telephone interview. “It’ll allow us to get some seeds in the ground and maybe get them up. But for a lot of areas, it’ll have to be followed up by a lot more moisture, especially in southern Kansas.”
Wheat futures for December delivery fell 25.25 cents, or 3.5 percent, to settle at $7.02 a bushel at 1:15 p.m. on the Chicago Board of Trade, the biggest drop since Sept. 1. Prices declined for a sixth straight session, down 9.5 percent since Sept. 2, capping the longest slump since early October.
About 6 percent of the U.S. winter-wheat crop had been planted as of Sept. 11, behind the previous five-year average pace of 10 percent, the U.S. Department of Agriculture said yesterday. Winter wheat, used to make bread, goes dormant until March and is harvested starting in May. The U.S. is the world’s largest exporter of the grain.
This week may bring “the biggest rain event in months for the driest areas of Colorado, Kansas, Oklahoma and northwest Texas,” T-Storm’s Tannura said in a telephone interview. “Even though this is clearly a major rain event and helpful to improving topsoil moisture, several more events of this caliber will be needed to break the drought.”
Wheat is the fourth-largest U.S. crop, valued at $13 billion in 2010, behind corn, soybeans and hay, government data show.
To contact the reporter on this story: Whitney McFerron in Chicago at wmcferron1@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
