U.S. wheat futures tumbled Wednesday on a combination of investors reducing risk exposure in the market and weather conditions that should ease stress to crops in the U.S. and Europe.
Wheat for July delivery ended down 35 cents, or 4.1%, at $8.12 a bushel at Chicago Board Of Trade. At the Kansas City Board of Trade, hard red winter wheat for July delivery lost 3.9% to $9.23 a bushel. Hard red spring wheat for July delivery closed down 2.8% at $9.54 1/4 a bushel at the MGEX in Minneapolis.
Broad based selling was consistent across the grain complex at CBOT, reflective of investors reducing risk in the absence of a fundamental change in the market, said Shawn McCambridge, grains analyst with Prudential Bache in Chicago.
Traders reduced risk after recent gains, worried Federal Reserve's rate decision and Fed Chairman Ben Bernanke's history making news conference might sway the U.S. dollar or other markets that influence commodities, McCambridge said.
Prices felt additional pressure from beneficial rains in dry parts of the U.S. Plains and Europe. The rains are expected to stabilize deteriorating crop conditions and improve production prospects.
Rainfall and cooler temperatures may help crop conditions through Kansas and parts of Oklahoma, according to private weather firm Telvent DTN. Western Germany, northern France and England may see cooler temperatures and showers in the driest areas, the firm said.
Wheat crops in central Europe, Germany were not in the same critical situation that wheat in U.S. plains are in, but the rains nonetheless are beneficial to developing crops, McCambridge said.
Traders are assessing the condition of the crops in the Northern Hemisphere ahead of the upcoming harvest. Wheat futures soared last year when harsh weather, including a historic drought in Russia, slashed output and reached 2 1/2-year highs in February on a surge in demand. Prices have since pulled back over 11%.
U.S. corn futures finished lower, sinking on the broad based selling in grains and forecasts for farmers to see less rain in key growing states like Iowa, Nebraska, Minnesota, North Dakota and South Dakota next week. The drier weather will "allow for some planting" to take place, said Joel Burgio, senior agricultural meteorologist for Telvent DTN, a private forecaster.
U.S. soybean futures ended lower in step with neighboring grain futures, succumbing to broader based investor selling across the grain complex at CBOT. Further pressure was derived from demand, as traders look for a continued pattern of slowing exports and soy crushing, as South America pumps fresh supplies onto the world market, analysts said.
Corn for July delivery, the most actively traded contract, ended down 13 1/2 cents, or 1.7%, to $7.59 1/4 a bushel. The New crop December contract dropped 8 1/2 cents or 1.3% to $6.67 1/4. Soybeans for July delivery dropped 4 3/4 cents, or 0.3%, to $13.84 1/2 a bushel.
July soymeal finished down 0.7% at $361.80 per short ton, while July soyoil dropped 0.4% to 58.41 cents a pound. July rice slid 1% to $14.50 1/2 per hundredweight.
U.S. oat futures tumbled to their exchange-imposed daily trading limits, as managed funds trimmed risk on a broader scale in grain futures. Oats for July delivery settled 20 cents or 5% lower at $3.80 a bushel. Ethanol futures slipped with corn futures, but lower inventory projections limited losses, analysts said. July ethanol ended down 0.4% at $2.663 a gallon.
--Tom Polansek contributed to this article.