June 12, 2012

US wheat futures drop on higher Kansas crop forecast

US wheat futures fell on expectations that yields in Kansas, the largest US producer of winter varieties, will rise, whereas the pace of the harvest was faster than normal.

About 20% of the nation's winter wheat was collected as of June 3, up from the average in the previous five years of 3%, USDA data show. Yields in Kansas will probably average about 40 bushels an acre, up from 35 bushels a year earlier, Kansas Wheat, an industry group, said this week.

"The yields we're hearing from Kansas are pretty good," Jason Britt, the president of Central States Commodities Inc. in Kansas City, Missouri, said.

Wheat futures for July delivery slid 1.8% to settle at US$6.3025 a bushel at 1:15 p.m. on the CBOT. This week, the price gained 2.9%, partly because dry weather threatens Russia's crop.

The commodity also declined as the dollar rose against a basket of major currencies, eroding the appeal of shipments from the US, the world's biggest exporter.

Soy futures for November delivery, the contract with the highest open interest, dropped 0.7% to settle at US$13.325 a bushel.