By Joanna Levin
THERE seems to be no end in sight for the drop in USA wheat prices, with the July contract hitting a new low during Friday trading, before recovering slightly to close at $2.98/ bushel, down 4¢ on the week. Wheat is the most depressed of the US grain markets, due to severe oversupply.
Thanks to this years unusual weather conditions, the winter wheat crop is progressing well, with 60% already headed, compared with a five-year average of 48%. The harvest is beginning in some areas of Texas.
Meanwhile, the ideal planting conditions have enabled farmers to get 90% of the spring crop into the ground, well ahead of the average figure of 62%. Not only is planting well ahead of schedule, but the growing conditions have also been ideal. An impressive 69% of the spring crop is already emerged, compared with a five-year average at this time of 32%.
All this may cheer up the farmer as he surveys his green fields, but it will hurt when it comes time to sell the crop. As long as the corn (maize) market remains on the defensive and weather conditions are favourable for the crop, wheat will remain in a bear market.