US wheat prices ignore frost risk

By Joanna Newman

WHEAT prices are unchanged over the past week, as fears of frost damage to Americas winter wheat crop recede.

The Chicago May futures contract closed at 257.25¢/bushel yesterday (Wednesday), little changed from last week.

Clearly, snowy weather and lower temperatures have done little lasting damage.

Ripening of the winter wheat crop is slightly further advanced than average, with 9% of the crop headed against a norm of 7%.

Spring planting conditions are also favourable for US producers and this is helping to pressure market prices.

Already 11% of the crop is in the ground due to mild weather, ahead of the 7% five-year average for this time of year.

Faced with high inventories and an imminent spring harvest, wheat farmers are hoping to feed more wheat to livestock in place of maize.

Certainly, wheats attractiveness in the grain ration has improved this week as the commodity has remained flat while maize prices rallied.

The other variable outlet for US wheat is the export market, where traders have grabbed at signs of possible new demand.

Attention is on China which may have to enter the market due to its own harvest concerns.

The US Department of Agriculture is tendering for 627,600 tonnes of US wheat for food-aid donation programmes, which should lend support to the domestic market.

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