US wheat market awaits spring planting figures

By Joanna Levin

US wheat prices remain volatile as the winter harvest gets under way and traders try to second-guess the spring crop. Already 35% of the winter wheat crop has been harvested, well ahead of the seasonal norm of 21% and a rate of completion this time last year of 14%.

Tomorrow will bring the spring wheat acreage report from the US Department of Agriculture and many analysts are looking for a drop to just over 16 million acres from 19.4 million last year. Anything higher than that would depress the market further.

The Chicago futures market collapsed to contract lows on Monday (29 June) on signs of better weather, after creeping upwards for most of last week. The July futures contract closed on Monday at 268.5¢/bushel, down 6% or 18¢ from 286.5¢/bushel a week ago.

As well as weather-related bearishness, wheat is suffering from concerns that the Asian currency crisis will hurt exports. US exporters have already fallen 26 million bushels behind USDA targets for the export year commencing 1 June. In the week ended 18 June, the USA exported only 17.8 million bushels, against a needed weekly average of 22 million bushels.