Wheat futures drop 2.4 percent, extending declines

Wheat prices fell as traders returned to work after the Christmas holiday.

March wheat fell 19.25 cents to $7.7450 a bushel, a decline of 2.4 percent.

Wheat futures have dropped 10 percent since the start of the month, putting wheat on course for its worst monthly performance in more than a year. Wheat slumped earlier in December after the government predicted that U.S. inventories will increase by the end of next year's growing season, in part due to weaker export demand.

Corn and soybeans also dropped. March corn fell 11 cents to $6.9325 a bushel, a decline of 1.6 percent. Soybeans for delivery in March dropped 17.25 cents, or 1.2 percent, to $14.18 a bushel.

Some analysts warned that price movements may have been exaggerated Wednesday as many market participants were still on vacation.

"Grains are suffering from a case of the holiday blues here," said Sterling Smith, a commodities strategist at Citigroup. "Trading is really quite thin and quiet."

In other commodities trading, metals edged higher as the dollar weakened against a group of currencies.

Gold for February delivery rose $1.20 to $1,660.70 an ounce. Silver for March delivery gained 13.8 cents to $30.035 an ounce and March palladium rose $7.85 to $692.40.

Copper for March delivery advanced 5.15 cents to $3.5975 a pound and platinum was unchanged at $1,534.90 an ounce.

The price of oil rose sharply after a report showed that the U.S. housing market is sustaining its recovery, boosting the outlook for economic growth, which generally boosts energy consumption and lifts prices.

U.S. benchmark crude jumped $2.37, or 2.7 percent, to $90.98 per barrel in thin post-Christmas trading in New York.

Natural gas gained 4.6 cents, or 1.4 percent, to close at $3.3920. Heating oil rose 4.91 cents, or 1.6 percent, to finish at $3.0513 a gallon. Wholesale gasoline rose 6.52 cents, or 2.4 percent, to $2.8158 a gallon.