GRAINS-Wheat skids to 8-mth low as snow blankets dry U.S. Plains
* Several inches of moisture fall in key wheat states
* USDA projects record large U.S. corn, soy harvests
* Federal Reserve rattles commodity traders
(Adds weather details, analyst comment, export sales estimates) CHICAGO, Feb 21 (Reuters) - U.S. wheat futures slid to an eight-month low on Thursday as a winter snowstorm brought moisture to key growing areas that have struggled with dryness for months. Nearly a foot or more of snow fell across Oklahoma and Kansas in the past 24 hours, and more was coming. The states are top producers of hard red winter wheat, used to make bread.
"It's the mighty snowstorm," said Jerry Gidel, chief feed grains analyst for Rice Dairy. At the Chicago Board of Trade, March wheat lost 2.2 percent to $7.22-1/2 per bushe1 by 11:45 a.m. CST (1745 GMT). March corn dropped 1 percent to $6.93-1/2 a bushel. The United States is coming out of its worst drought in more than half a century, and farmers in key states have worried that their crops will not produce large yields because of dryness. However, conditions are on the upswing for corn and soybean production, the U.S. Department of Agriculture's chief economist said at an annual conference in Washington D.C. The USDA forecast the nation's corn crop at 14.35 billion bushels, up 35 percent on the year, and soybean output at 3.405 billion bushels, up 13 percent. Season-average prices for 2013/14 are expected to tumble 33 percent to $4.80 per bushel for U.S. corn and 27 percent to $10.50 for soybeans, according to the department. "We have the drought continuing to shrink, with the evidence of some big storms coming through," said Don Roose, president of U.S. Commodities. Still, the drought has not ended. The country needs "several more storms like this to really start turning the tide," said Brian Fuchs, a climatologist with the University of Nebraska Drought Mitigation Center.
BROAD PRESSURE Commodities succumbed to broad pressure from worries the U.S. central bank will scale back its stimulus program sooner than expected, which could dry up liquidity in a range of markets, traders said. Minutes from the Federal Reserve's last policy meeting, released on Wednesday, suggested the bank might have to slow or stop buying bonds before seeing the pickup in employment the programme is designed to deliver. "The government's sending a signal that their stimulus program is ending," Roose said. "We've got a hangover from that." Export demand helped soybeans buck the weaker trend. March soybeans added 0.6 percent to $14.91 a bushel. Private exporters struck deals to sell 130,450 tonnes of U.S. soybeans and 110,000 tonnes of U.S. soft red winter wheat to unknown destinations, with delivery of both sales split between this marketing year and next year, according to USDA.
The USDA will issue its weekly export sales report on Friday, one day later than usual due to the Presidents Day holiday on Monday. Traders expect sales to be 300,000 to 600,000 tonnes for soybeans; 400,000 to 600,000 tonnes for wheat; and 150,000 to 350,000 tonnes for corn.
Prices at 11:44 a.m. CST (1744 GMT)
LAST NET PCT YTD CHG CHG CHG CBOT corn 694.50 -6.00 -0.9% -0.5% CBOT soy 1490.00 7.25 0.5% 5.0% CBOT meal 437.50 3.90 0.9% 4.0% CBOT soyoil 51.47 -0.60 -1.2% 4.7% CBOT wheat 723.00 -15.25 -2.1% -7.1% CBOT rice 1593.00 -9.50 -0.6% 7.2% EU wheat 242.75 -1.00 -0.4% -3.0%US crude 92.89 -2.33 -2.5% 1.2% Dow Jones 13,846 -81 -0.6% 5.7% Gold 1577.26 14.97 1.0% -5.8% Euro/dollar 1.3194 -0.0086 -0.6% 0.0% Dollar Index 81.3230 0.2540 0.3% 1.9% Baltic Freight 737 2 0.3% 5.4%
(Additional reporting by Carey Gillam in Kansas City, Nigel Hunt and Natalie Huet in London, Naveen Thukral in Singapore and Gus Trompiz in Paris; Editing by William Hardy, Sofina Mirza-Reid and Bob Burgdorfer)