CHICAGO (Dow Jones)--U.S. wheat futures are expected to start lower Thursday on increasing expectations rain will ease dryness threatening to reduce plantings in the Plains.
Traders predict soft red winter wheat for December delivery, the most actively traded contract, will open down 4 cents to 6 cents a bushel at the Chicago Board of Trade. In overnight electronic trading, the contract slid 5 cents, or 0.7%, to $6.99 1/2 a bushel.
Driving prices lower are forecasts for showers in parts of the Plains that have been struggling with dryness for nearly a year. Scattered showers "will help recharge soil moisture and improve conditions for planting and early growth of the next wheat crop," said Joel Burgio, senior agricultural meteorologist for Telvent DTN, a private weather firm.
Traders are paying close attention to weather forecasts because persistent dryness has raised concerns farmers won't plant the next wheat crop this fall. The crop, which will be harvested next spring, needs moisture to start growing and establish itself before winter.
"Weather models are suggesting better chances of rain," said Brian Hoops, president of Midwest Market Solutions, a commodities brokerage in South Dakota. The forecasts are "helping improve winter wheat producers' attitude about seeding winter wheat in dry soils," he added.
Yet, it may be too early for farmers to breathe a sigh of relief. The National Weather Service said the return of the weather phenomenon La Nina elevates the chances for "exceptional drought areas of the southern Plains" to stay dry through the end of the year.
In other news, U.S. wheat export sales of 413,500 tons for the week ended Sept. 8 were within traders' estimates. Still they were down 19% from the previous week and 7% from the prior four-week average, according to the U.S. Department of Agriculture.