Morning Futures Roundup
Wheat Prices Continue to Grind Lower
Wheat futures have been on a steady price decline as the market attempts to digest higher world supplies this year. The USDA is its August Crop production report, estimated that the U.S. fall Winter Wheat crop would total 1.537 billion bushels, up from their 1.525 billion bushel estimate in the July report. This increase was also reflected in the 2009-10 carryout estimates which the USDA raised to 743 million bushels, up 37 million bushels from July. World Wheat production also increased this year, causing the USDA to revise upward the world carryout total to 183.56 million metric tons.
This bearish news comes at a traditionally weak time for Wheat prices, as the U.S. harvest is being completed. However, U.S. producers may be reluctant sell their current harvest right away, given sharply lower cash market prices. Low Wheat prices may also affect the number of acres planted to Winter Wheat this upcoming season, especially in more marginal Soft Red Winter Wheat growing areas in the mid-southern states like Missouri, Tennessee, and Arkansas, where the cash basis has been running almost one dollar below futures. U.S. Wheat exports have been steady, with recent tenders coming from Egypt and Japan. However the wild card could be India, which is suffering from rising food prices due to below normal monsoon rains this year. Although India's wheat supplies seem adequate, it appears that they will not be exporting Wheat as earlier feared.
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