By Joanna Levin
TRADING last week brought daily declines in US wheat prices, further extending the decline that has caused wheat to lose a third of its value since the start of the year.
The Chicago December wheat contract settled on Tuesday 1 September at 253.5 ¢/bushel, down 0.5 ¢ from the previous day and down from 275 ¢/bushel a couple of weeks ago. The grain is now at its lowest level in 21 years.
Prices are affected by overproduction and concerns about the global economy which could damage exports. With commodity deflation, world wheat producers are encouraged to sell off grain at ever lower prices.
Already 79% of Americas spring wheat crop has been harvested due to good weather conditions, well ahead of the 39% harvested at this time in 1997.
Grain elevators are full and this wheat urgently needs to be moved to make room for Autumn harvest crops. Most market analysts expect further declines in wheat prices in the weeks to come.