The rains that drenched dry wheat fields in Kansas are dousing prospects that the grain will emerge from a bear market.

Improved soil moisture boosted prospects for crops in the US, the largest exporter, at a time when global inventories already were set to reach a four-year high. Speculators expanded their record bets on lower prices for a fourth week, before a field survey showed farmers will boost output by 17 percent in Kansas, the top US grower of winter wheat.

The surplus has intensified competition among suppliers, with Russia and Romania beating out US and French shippers in a tender last week by Egypt, the biggest buyer. Sellers are undercutting each other on prices, and American exports are trailing last season's pace by 25 percent, government figures show. Rain also is improving the grain crops in Russia, the fourth-largest exporter, where the government is poised to lift a tax on shipments that had slowed sales.

"We've had relatively fair weather conditions in the growing regions, and I think that bodes well for crop yields again," Peter Sorrentino, a Cincinnati-based fund manager at Huntington Asset Advisors Inc, who's not investing in grains, said by phone May 6. "The Southern Hemisphere harvest was pretty nice, in terms of net-yields, and that combined with the North American region means we've got plenty of supply."

The net-short position in wheat expanded 4.2 percent to 111,409 futures and options contracts in the week ended May 5, US Commodity Futures Trading Commission data show. That's the most since the data begins in 2006, and speculators have been bearish since mid-January.

Futures on the Chicago Board of Trade fell as low as $4.6075 a bushel on May 5, the lowest since June 2010, and dropped 19 percent this year. The Bloomberg Commodity Index fell 0.2 percent since the end of December, while the MSCI All-Country World Index of equities rose 5.4 percent. The Bloomberg Dollar Spot Index gained 3.2 percent.

Rain has eased the stress on crops in Kansas, bringing relief to Paul Penner and other growers. About 68 percent of the state was in moderate-to-extreme drought as of May 5, down from 98 percent a year earlier, the US Drought Monitor estimates. In some areas, April showers were more than double the average.

'Disaster' loomed

After dry conditions last year shriveled plants across the Great Plains, crops were on "the verge of another disaster" when the rains began arriving in April, said Penner, who grows wheat on 1,500 of the 3,500 acres he farms in Hillsboro, Kansas. He expects his yields may be 50 bushels an acre. That compares with 28 bushels on average for the state last year.

Penner's crops were among those surveyed as part of the Wheat Quality Council tour, which sampled 659 fields in Kansas and parts of Oklahoma, Nebraska and Colorado over three days. Tour participants, on average, estimated Kansas will produce 288.5 million bushels. That compares with 246.4 million last year, which the US Department of Agriculture says was the smallest since 1989.