By Joanna Newman
THE wheat market achieved a small upturn ahead of the Memorial Day holiday weekend, amid talk of some disease damage to the winter wheat crop and weather concerns.
As of last week, there had been mild delay to spring planting, with only 85% of the crop in the ground compared with a seasonal average of 89%.
However, favourable conditions over the weekend and a good short-term forecast for both winter wheat harvesting and the new spring crop prevented prices from rising further this week.
The Chicago July futures contract settled on Tuesday (2 June) at 251.75¢/bushel, up only slightly from 248.8¢ a week ago, and still close to its lowest levels in 20 years.
Wheat farmers can see little to cheer them in the market.
On the demand side, extremely competitive maize values make it difficult for wheat to make its way into the livestock feed ration, unless it becomes even cheaper.
However, there is talk of a rally in maize if the USA looks set to suffer a drought this summer, which in turn could make wheat more attractive to cattle producers.
High inventory levels of wheat are creating a logistical bottleneck. Farmers have already harvested 2% of their winter wheat crop and will have trouble finding space in the bins.
At least the government is a buyer, with large volumes of wheat expected to be shipped over the next two months under federal aid programmes. This should help free up grain elevators.