By Joanna Newman
WHEAT prices dropped sharply again over the past week, as oversupply and the prospect of a healthy winter wheat crop took their toll.
The US Department of Agriculture has left its forecast of domestic ending stocks for the 1998/99 season unchanged at 955 million bushels in its latest Supply and Demand report. This is up sharply from the 722 million-bushel surplus last year.
With harvest just six weeks away, 73% of the countrys winter wheat crop is rated good to excellent.
Thanks to the good weather conditions, 7% of the spring crop is already planted, ahead of the five-year average for the time of year of just 2%.
Weakness in maize is also pressing US wheat prices, as wheat producers attempt to compete with maize for the feed-grain market.
These factors have helped drive the Chicago May futures contract down to 256.0¢/bushel on Tuesday (13 April), compared with 279.5¢ last week.
However, there have been encouraging signals on the export front.
It appears that details of US wheat donations to Russia have been finalised despite the Balkan crisis, with reports of a freight tender for 650,000 tonnes including wheat and soya beans.
The first delivery of food-aid shipment is due to arrive in Russia in late April.
Meanwhile China has lifted its ban on wheat imports from the Pacific Northwest infected with a fungus known as TCK, widely regarded as harmless.
However, this trade agreement is unlikely to translate into actual export business for many months.