March 2, 2012

After Federal Reserve Chairman Ben S. Bernanke failed to signal further measures to stimulate the economy, wheat fell from the highest level in almost a month as winter snow may help ease drought in parts of the US.

May-delivery wheat lost as much as 1.1% to US$6.605 a bushel on the Chicago Board of Trade, before trading at US$6.625 at 3:10 p.m. Singapore time. It surged as much as 0.9% yesterday to the highest level in four weeks.

Storms in the past two days brought as much as eight inches (20 centimetres) of snow to parts of North Dakota, the biggest US grower of spring wheat, while accumulations reached 12 inches in Minnesota, according to the National Weather Service. Conditions in the two states ranged from "severe" drought to "abnormally dry" as of February 21, after months of below-normal precipitation, according to the University of Nebraska at Lincoln.

"The better seasonal conditions should translate into an increase in US spring wheat planting," Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report e-mailed today. "Global wheat supplies are huge and the moisture profile in the northern US grain belt has improved following recent winter storms."

Equities, bonds and metals dropped yesterday after Bernanke affirmed that interest rates may stay low at least through late 2014, without offering any indication that further monetary easing is under consideration.

Corn for May delivery fell as much as 1.1% to US$6.505 a bushel after the most-active contract gained 3% in February. Soy for May delivery slid as much as 1% to US$13.0625 a bushel, the first loss for the most-active contract in nine days. Futures jumped 10% in February, the best monthly performance since December 2010.

Exporters in the US, the world's largest soy grower, sold 285,000 tonnes of the oilseed to China and 120,000 tonnes of corn to Mexico, the USDA said yesterday. As of February 16, exporters had agreed to ship 19.2 million tonnes of soy to China, the USDA said February 24.