Wheat prices settle lower as Fed holds rates steady

Wheat futures tilted lower in American trade as the dollar edged higher according to their inverse relation, which follows earlier data from the U.S., the world's second largest wheat exporter. 

As of 06:47 GMT, wheat futures due on July 15 fell 0.22% to $453.00 a bushel from the opening of $454.00, with an intraday low at $445.75, and a high at $456.00, while the dollar index rose 0.11% to 99.09 from the opening of $456.00. 

Wheat's decline away from two-month high comes after a tour survey of wheat crops in Kansas showed better-than-expected yield in the northwestern region of the state, with the survey that included about 222 fields yesterday showing an average of 43 bushels per acre. 

The results are better than expected following cold spats and snowing in the state in the weekend, while still lower than the first day of the official tour survey last year at 47.1 bushels per acre. 

Farmers yielded 37 bushels per acre and 28 bushels in 2014 and 2015 respectively, while investors are looking forward for more results of the tour to find out how much of the crop was damaged by the snow last weekend. 

Otherwise, earlier U.S. data showed the economy created 177 thousand new private sector jobs last month, while investors await the official payrolls report on Friday, expected to show 194 thousand new jobs, and for the unemployment rate to rise to 4.6% in April. 

The ISM services PMI, important due to the reliance of the U.S. economy on the services sector, jumped to 57.5 in April.

Finally, the Federal Reserve help overnight interest rates unchanged in today's meeting at between 0.75% and one percent, after raising them by 25 basis points in the mid-March meeting. 

Investors are now pricing in a possible rate hike in the June meeting, when policymakers are expected to unveil their three-year forecasts for inflation, growth, unemployment, and interest rates.