By Joanna Levin
INCREASED supply and disappointing demand continue to drive down US wheat prices. And with the spring crop already 90% planted, a bumper 1998 harvest could boost supplies even higher.
Short-term weather forecasts indicate excellent growing conditions in the USA and Canada. The winter wheat crop is already well advanced, with 60% headed, compared with a five year average of 48%.
The US will start to harvest what analysts expect to be a bumper winter crop during the next two weeks. But farmers face lower returns in a market where export demand is falling short.
Only just over 10 million bushels of wheat were inspected for export during the week ended 7 May, compared with market expectations of up to 15m bushels. And to make matters worse for those hoping for better prices later in the season, farmers in some regions face a shortage of storage space.
The Chicago July futures contract closed on 19 May at a contract low, falling below the psychological $3.00/bushel mark to $2.99/bushel, down 13.5¢ from the start of last week.