By Joanna Newman

THE US wheat market has given up all the recent gains achieved during the fourth quarter of 1998 and is now close to the levels of last September.

It was then that the market touched its lowest point in many years.

The Chicago March futures contract settled at 271.0¢/bushel on Tuesday (26 January), almost unchanged from last week but down from 310¢ in October.

Although the winter wheat acreage is at its lowest level since 1972, oversupply remains a worry.

Wheat must compete with maize as animal feed, at a time when the number of cattle on feed is falling.

The latest monthly inventory report shows a 5% drop in December from a year earlier on the number of head in the nations feedlots.

On the export front, the market has been cheered by reports that the US government may allow a major sale of wheat to Iran.

Meanwhile, Agricultural Secretary Dan Glickmans visit to Russia has re-awakened talk of US wheat shipments.

Food aid to Russia was first scheduled for the end of 1998 and the excitement helped trigger a US market rally.

However, the shipments have been delayed until February at the earliest and this has contributed to the bearish market at home. Russia is reported to have requested an additional 3 million tons.

While US wheat producers fret about Russia, they face another problem on the export front.

The devaluation of the Brazilian Real earlier this month and talk of a possible devaluation in the Chinese currency will make US wheat and other grains less competitive on the world market.

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