Wheat Down 40 Percent from February High

Since the record price of wheat in February, prices have continued to fall as an expected large harvest has caused the golden grain to fall by 40 percent since the $13.50 a bushel record.

On the Chicago Board of Trade (CBOT) soft red winter wheat has plunged to $8.01 a bushel, the lowest since November 2007.

According to the International Grain Council, wheat will probably reach a record harvest of 645 million tons in 2008-09.

"The big rise in prices in 2007 and early 2008 was a strong incentive to increase the planting of wheat," said Sudakshina Unnikrishnan, an agricultural analyst at Barclays Bank.

"The market is pricing-in expectations of a bigger crop from summer onwards."

Government subidies by the U.S. and Europe for corn-based ethanol has been a major contributor to the price increases, as farmers over the last several years have taken acreage out of wheat production and put it into corn.

Wheat farmers will probably be a year too late to get the huge prices, as their huge harvest will cause price decreases, as is already being factored into the market.

Global Wheat Production Expect to Increase 6%

A report from Utrecht, Netherlands-based Rabobank, says the global production for wheat should increase by 6 percent this year, making it a record harvest globally.

Motivating the higher output is the increasing prices of the commodity, based on growing food demand, investors, biofuels and feed for animals. Stockpiles around the world also plunged last year causing the grain to increase in price as well.

"Wheat production is forecast to rebound strongly, resulting in a partial recovery in world inventory levels and taking some pressure off world prices,' a team of analysts in Sydney, Australia, wrote in the report.
It is expected the harvest will bring in an additional 37 million metric tons to bring the total for the the year to 640 million tons. Stockpiles around the world should grow by 9 percent as a result.

This should help bring prices down during the second half of 2008 said the report, as production grows beyond demand by about 12 million tons.

Nations Continue to buy Domestic Wheat to Combat Inflation, High Food Prices

Nations continue to acquire domestic wheat from their farmers in an effort to boost reserves as food prices wreak havoc across the world.

India has bought 7 percent more wheat than usual from its domestic farmers, in an effort to combat inflation, which has reached a three-year high in the country. A number of state firms bought a combined 3.1 million metric tons of wheat from farmers since April 1. Eventually the figure may reach as high as 15 million tons, according to Food Corp. Chairman Alok Sinha.

Inflation for India has climbed to 7.14 percent over the same week a year ago.

Kazakhstan also announced today that they have instituted a four-month ban on wheat exports, also in an attempt to curb inflation and social unrest. While that would help Kazakhstan, it could hurt other nations in the region which have traditionally relied on Kazakh wheat.

Wheat News Weekend Roundup

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Spring wheat market shows some recovery

Despite a slightly bearish Prospective Plantings Report, the spring wheat market showed signs of recovery in the days following.

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World Wheat Production Boosted This Month, Consumption Trimmed, & Stocks Raised

World wheat production in 2007/08 is projected up 1.7 million tons this month to 606.7 million. The major increase is for Ethiopia, up 1.2 million tons as very good rains boosted yields.

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Adani sees wheat output at over 75mt

A bigger wheat crop is crucial to efforts by Prime Minister Manmohan Singh’s government to cool inflation that’s running at a three-year high before next year’s general elections.

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Scientists pit bacteria against fungi to protect wheat

Beneficial flower-dwelling bacteria could soon join the fight against Fusarium graminearum, the fungus that causes Fusarium head blight disease (scab) in wheat, barley and other cereal crops.

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Philippines Seeks Wheat Supplies After China Rebuff

The Philippines said China turned down a request to supply wheat, adding to concern that the world faces a worsening shortage of staple foods that has already driven grain prices to records.

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US Wheat Outlook: Seen Mixed On Overnight, CBOT Rebound

U.S. wheat futures are poised to start Friday's day session mixed, with Chicago Board of Trade contracts seen rising in a rebound from losses, traders said.

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U.S. Wheat Closes Mixed - Weather, Nearby Markets Key Factors

U.S. wheat borrowed from its commodity neighbors corn and soybeans on the CBOT, helping it to gains, even though it was the "the weakest link in there, of all the grains," said Larry Glenn, owner of Glenn Commodities. "It's been following."

On the Chicago Board of Trade, May wheat remained at $9.34 a bushel. Minneapolis Grain Exchange May wheat ended at $13.20, a 5 cent increase, and May Wheat on the Kansas City Board of Trade settled 1 cent higher.

Continued forecasts of rain for the U.S. plains dampened expectations for a large, new crop, causing wheat to pull back from its borrowed surge earlier in the day.

According to the U.S. Department of Agriculture, expected supply and demand continues on course U.S wheat carryout, and remains at 242 million bushels; the same as in March.

Some analysts said the data from the USDA had no significant impact on the wheat markets, as weather, along with nearby markets are the what's affecting the wheat market more than anything else.

Another key factor is the expected huge global harvest this year, which could also hinder prices. Others think importers may keep old wheat inventory minimized, while waiting for the new crop to enter the market.

The Weekend Wheat News

Wheat outlook and news


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Grant Given to Cornell to Fight Wheat Disease

Bill and Melinda Gates Foundation awards Cornell $26.8 million.

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US Wheat Review: Up On Short-Covering; MGE May Rises Limit

U.S. wheat futures ended higher Friday on technical buying and short-covering, with the nearby Minneapolis Grain Exchange contract closing limit-up for the third consecutive day.

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Strength in beans and wheat could not rally corn

Wheat opened higher and closed sharply higher. Minneapolis wheat was limit up again and synthetically trading another $1 higher. This carried the HRW and SRW contracts sharply higher on the day.

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Wheat planting up; corn down

The release of the 2008 U.S. Department of Agriculture prospective planting report this week shows wheat acreage up and corn acreage down, which led at least one analyst to predict corn rationing.

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Triticum Mosaic Virus adds new wrinkle to wheat disease picture

Kansas wheat producers needing another reason to control volunteer wheat have a new reason for consideration. First found by Kansas State University researchers in 2006, a newly discovered virus affecting wheat was officially recognized and named Triticum Mosaic Virus in 2007.

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Wheat Jumps on Weather Concerns

Wheat prices shot up Friday as investors bet that a mix of wet and dry weather in wheat-growing U.S. states will damage crops and tighten supplies of the grain used to make bread, pasta and other foods.

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Wheat Acres

The USDA reported planting intention estimates on Monday, March 31. The highly anticipated report held little in the way of major surprises, but the current supply situation and high prices require market participants to look at this report with a great deal of scrutiny. While it appears the marketplace has quickly forgotten about the bearish aspects of the report, market participants will continue to measure factors such as domestic and global demand and weather problems against the potential wheat production set forth by this report.

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Wheat rated in mostly fair to good condition

Winter wheat was 9 percent pastured last week, with the crop rated in mostly fair to good condition.

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Wheat Rises on Forecast for Dry Conditions in U.S. Great Plains

With dry weather expected to continue in the great plains, wheat rose for the second day in a row, as the winter crop is coming out of dormancy.

Both western Kansas and Texas, along with the Oklahoma Panhandle haven't received rain for two weeks, and there isn't any precipitation expected in the next five days either.

Meteorologists say the severe draught, which extends from Texas to the Canadian Prairies threatens the crop this year.

It is also expected that dry weather will expand to the central midwest from April through August, further disrupting wheat yields.

The U.S. Department of Agricultue said in a report on March 11 that global wheat inventories could fall to 110.4 million metric tons by May 31, with U.S. inventories possibly plunging by 6.6 million tons. That's a 47 percent drop from last year.

July delivery for wheat futures increased by 2 cents to reach $9.525 a bushel on the CBOT.

Wheat Futures Higher on Weather Concerns: both dry and wet

U.S. wheat futures finished higher at the exchanges, as they bounced back after the recent sell-offs, according to traders.

Contrary to the concerns over the wet acreage affecting planting of corn, wheat is having the opposite problem, as dry weather in key areas may end in the abandonment of wheat acreage in a number of places.

There were also concerns about some excess precipitation in soft winter wheat areas that could hinder planting.

For the Kansas City Board of Trade, May wheat increased by 36 cents to $9.86 a bushel, while the Minneapolis Grain Exchange May wheat increased by its allowable limit of 60 cents, to finish at $12.15. May wheat for the Chicago Board of Trade jumped by 41 1/2 cent to finish a $9.36 1/2.

Wheat inventory expectations and a possible large global planting had kept prices down for awhile.

Wheat Prices Drop as Dollar Strengthens

Wheat and other commodities continue to fall on the assumption the strengthening U.S. dollar and equities market will continue to rise.

Another variable is the increase in planting this year which could cause prices to fall in the long term.

"Some of the financial stocks look better, and some people feel that the worst is over" for the U.S. economy, said Vince Ambrose, a trader at MF Global in Chicago. "With the dollar being strong, it's going to hurt these commodities."

Wheat futures fell by 15 cents for May delivery, to $9.14 a bushel on the CBOT at about 12:30 p.m. Earlier in the day they fell to the lowest since January 11, selling for $8,9875 a bushel. Monday's contracts fell by 60 cents, the maximum allowed on the exchange.

Inventories, which fell last year because of poor weather, should increase this year with the larger acreage planted.

Winter Wheat

U.S. farmers have planted 4.1 percent more winter wheat than last year during September through December, according to the report released by the U.S. Department of Agriculture.

Spring wheat sowing is also expected to increase by 7.8 percent over last year's April and May plantings.

"I don't see wheat falling out of bed," said Vince Ambrose, a trader at MF Global in Chicago. "Everybody grows wheat, and the weather looks better, maybe not so much in the U.S. but globally. Along with that, we'll see lower prices down the line."

The increase in planting and supply should keep the wheat prices down more than in the recent past.

The wheat crop in the U.S. is worth about $13.7 billion, the fourth-largest crop in the U.S. The leading crops are corn, soybeans and hay.