Forexpros – Wheat futures declined for the first time in four days on Thursday, retreating from a three-week high as favorable weather conditions in the U.S. Great Plains region boosted prospects for spring-wheat crops and as an end-of-the-month short-covering rally ebbed.
On the Chicago Mercantile Exchange, wheat futures for May delivery traded at USD6.6488 a bushel during European morning trade, shedding 0.41%.
It earlier fell by as much as 0.85% to trade at a session low USD6.6062 a bushel. Prices hit USD6.7125 a bushel on Wednesday, the highest since February 7.
Wheat prices rallied by as much as 4.5% in the three sessions leading up to Thursday, as hedge funds and large institutional investors covered short positions ahead of Wednesday’s expiration of the March contract.
The strong performance prompted some investors to sell their position and lock in gains on profit taking amid concerns over ample global supplies.
Global inventories of the grain may reach a record 213.1 million metric tons in the 2012-13 marketing season, eclipsing the previous record in 1999-2000 season, according to the U.S. Department of Agriculture.
Agricultural commodity trading house INTL FCStone last week forecast global stocks could total 220 million tons in the coming 2012-13 marketing year, while the International Grains Council expects world stocks to rise to 211 million tonnes.
Wheat prices came under pressure after crop-friendly snow and moisture fell over the weekend and more snow is expected later this week in the dry areas of the U.S. Northern Plains, helping to buoy prospects for spring seedlings.
Light rain, rain mixed with snow and snow was also in the forecasts, moving through the north central and northern Midwest, benefitting soil moisture ahead of spring.
The U.S. is the world’s third largest wheat producer and biggest exporter of the grain
Meanwhile, in broader market news, Federal Reserve Chairman Ben Bernanke expressed a cautious view on the U.S. economic recovery, while refraining from suggesting a third round of bond-buying.
In testimony before Congress on Wednesday, Fed chair Bernanke said that while keeping monetary stimulus is warranted, rising gasoline prices are likely to push up inflation temporarily and the drop in unemployment has been more rapid than expected.
But investors looking for signs of more monetary easing were disappointed as he refrained from mentioning any plans to move toward a third round of quantitative easing bond-buying, known as QE3.
Elsewhere on the Chicago Mercantile Exchange, corn for May delivery shed 0.45% to trade at USD6.5438 a bushel, while soybeans for May delivery traded at USD13.1425 a bushel, dipping 0.38%.
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