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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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.

Effective Date for Price Limit Rules on the Kansas City Board of Trace Wheat is March 28, 2008

On Friday, March 28, it needs to be remembered that the Kansas City Board of Trade has been given approval by the Commodity Futures Trading Commission (CFTC) to change the daily price limits for hard red winter wheat options and futures.

Since it's the effective business date, it entails the evening session on Thursday, March 27, 2008.

The press release said:

"The initial daily price limit for wheat remains at 60 cents per bushel and will increase by 50 percent the following trading session when the price of two or more futures contract months within the first five listed non-spot contract months, or the final contract month of a crop year, closes at limit bid or limit offer. Price limits can expand two consecutive times: to a 90 cent per bushel limit and then to a maximum $1.35 per bushel limit.

"Daily price limits will step back to their prior levels when no futures contract month closes at limit bid or limit offer that day. If price limits are $1.35 per bushel and no wheat futures contract month closes limit bid or limit offer, daily price limits for all contract months revert back to 90 cents per bushel the next business day. If price limits are 90 cents per bushel and no wheat futures contract month closes limit bid or limit offer, daily price limits for all contract months revert back to 60 cents per bushel the next business day. The CME Group is adopting the same price limits policy for its wheat contracts.

"Following the expanded price limits effective trade date February 11, market users asked for additional changes. Market users wanted to see: price limit provisions that expand based on the activity of the front months where the majority of open interest resides, a maximum amount that price limits can expand to, and provisions that allow price limits to contract at the same rate that they expand. These changes address all three of these concerns.

"Options pricing is subject to the same daily price limits as the underlying futures contract."