Wheat Prices Fall On Abundant Global Supply

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Wheat prices fell to a new low for the year Thursday, hurt by abundant global supplies, light demand and moderate weather.

The decline for wheat, coupled with a stronger dollar, also sent soybeans and corn lower. Metals inched up slightly while energy prices fell.

Wheat for May delivery fell 9.5 cents, or 2 percent, to settle at $4.665 a bushel. It was the lowest price for the year, falling below the previous low of $4.69 a bushel on Feb. 3.

Thursday's price for wheat was about 8 percent less than a year ago, when it closed at $5.08 a bushel.

U.S. wheat prices have been pressured by foreign competition, which has been selling the crop at a lower price, an abundant global supply and moderate weather, Northstar Commodity analyst Jason Ward said.

"Right now, the crop looks good, the supply looks strong and the demand's, I would say, far from great," he said.

Corn and soybeans also fell, in part because of wheat's decline, but also because the dollar strengthened against other currencies. The exports of both crops are large, so a stronger dollar makes them more expensive for overseas buyers since they are traded in dollars.

Soybeans for May delivery fell 17.5 cents to $9.425 a bushel and corn fell 10 cents to $3.55 a bushel.

In the energy sector, natural gas tumbled 4 percent after the Energy Information Administration said the already abundant supply is 8 percent more than the five-year average.

Natural gas for April delivery settled down 12.4 cents at $3.981 per 1,000 cubic feet after falling as low as $3.940 earlier in the day on the New York Mercantile Exchange.

In other Nymex trading, benchmark crude for May delivery fell 8 cents to settle at $80.53, April heating oil settled down 0.14 cent to $2.0693 a gallon and April gasoline fell 0.35 cent to $2.2177.

Gold settled up $4.10 at $1,092.90 an ounce for April delivery. May silver rose 10 cents to settle at $16.741 an ounce and May copper rose 3.5 cents to $3.3805 a pound.

In a related development, U.S. federal regulators are considering whether they should restrict the volume of speculative trading in metals futures as gold prices have surged.

The Commodity Futures Trading Commission is gathering views from exchanges, banks and traders on restricting the amount of trading in gold, silver and copper futures by market players who are solely financial investors.

Copyright 2010 The Associated Press.



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