By Joanna Newman
US WHEAT prices have plummeted in continued worries of the amount of wheat in store.
The Chicago March futures contract closed on Wednesday (13 January) at 274.25¢/bushel, compared with 287.5¢ a week ago.
An estimated 1.89 billion bushels of wheat was in store on the 1 December 1998 – more than in any previous December since 1990.
The quantity stored represents an annual increase of 17%, according to figures from the United States Department of Agriculture.
Fears of low prices have resulted in farmers planting a smaller winter wheat crop this year but even that has failed to restore market optimism.
This winters wheat acreage has shrunk to a mere 43.35 million acres, the smallest planting since the early 1970s.
Many analysts warn that the drop in acreage is insufficient to restore a supply equilibrium.
Despite the market collapse, US domestic prices are still at a premium to world levels.
But this weeks devaluation of the Brazilian Real is seen as further hurting US export competitiveness for all grains.
Unless there is a major weather scare for the US winter wheat crop, prices are expected to remain depressed.