By Joanna Newman
THE US winter wheat crop is progressing well due to the mild weather and 94% of the crop has emerged.
This is exactly in line with a five-year average for this time of year of 94%. But ample supply – along with an overhang of unsold summer wheat in farmers hands and weakness on other grains – are depressing prices at home.
In the absence of any disruptions in the domestic arena, US wheat prices are largely being driven by the fortunes of the export market.
After slowly falling lower for a couple of weeks, US wheat prices suddenly plunged on Wednesday (9 December). The Chicago December futures contract settled at 262.0¢/bushel, down 8.75¢ from Tuesday and down further from 270.5¢ a week ago.
The market was reacting to disappointing news that Pakistan has awarded its 500,000 tonne tender to Canada and Australia, not the USA as hoped.
On the positive side, there are rumours that Pakistan will re-tender for more wheat in the near future and may also seek donations of food-aid wheat from the US Department of Agriculture. If the Government starts giving wheat away to Pakistan as well as the recent grants to Russia, this could help shift stocks before the winter wheat harvest in the spring.