By Benjamin Parkin
CHICAGO--Wheat futures fell to a seven-week low as traders worried that improving U.S. weather prospects would exacerbate a glut and keep prices down.
May wheat futures dropped 1.4% to $4.30 1/4 a bushel during Monday's session at the Chicago Board of Trade, undoing gains made overnight to fall to the lowest close since Jan. 30.
Erratic weather in major wheat growing regions sparked bets that the nascent crop would suffer some disruption, but favorable forecasts for the coming weeks have traders backtracking.
A spell of hot, dry weather earlier this year prompted some wheat to come out of dormancy early; a cold snap last week damaged some of that crop. But wet weather this week and next could now help to offset any disturbance, analysts said.
With supplies at multiyear highs, traders have soured on the grain. Government data released Friday showed that speculative funds extended their bets that wheat prices would fall. Funds increased their net short positions in wheat, according to the Commitment of Traders report, and entered one in corn.
That prompted traders to buy corn futures overnight on thoughts that they were oversold, but those gains were reversed in Monday's session. CBOT May corn futures fell 1.1% to $3.63 1/2 a bushel. Corn has suffered on the prospect of a large South American crop, with Argentina's harvest underway.
Soybean futures moderated, falling 0.1% to $9.99 1/2 a bushel.
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