Wheat prices dropped Friday as weather forecasts call for rain that could improve crops in the U.S. Prices had been surging this week amid fears dry weather could damage crops.

May-dated wheat futures contracts dropped to $5.5025 per bushel, down 5 cents on the session.

Department of Agriculture weekly export sales were released yesterday. Wheat sales were reported at 235,800 metric tons, including 213,800 for the current marketing year. Sales fell 41% in the week and came in below trade expectations of 300,000 to 500,000 MT.

With little economic news on the agenda, Federal Reserve Chair Ben Bernanke's remarks to bankers in Phoenix were in the spotlight. In prepared remarks, Bernanke warned banking supervisors to pay close attention to their compensation structures, reflecting the ongoing uproar over $165 million in bonuses given out to executives at American International Group Inc. (AIG).

The dollar hovered near 1.3575 against the euro, compared to yesterday's 10-week low of 1.3737. The buck saw its largest weekly decline against the euro since the inception of the single currency. The greenback also improved slightly versus the yen and pound.

Other commodities also slipped off recent highs. Light sweet crude oil for April delivery dropped to $51.06, down 55 cents on the session. Prices touched as low as $50.30. May-dated crude, which takes over as the front-month contract, inched up 3 cents to $52.07.

April-stamped gold finished the session at $956.20, down $2.60 for the session. Prices touched as low as $948.70 in the early going.

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