Wheat Futures Fall to 7 1/2-Year Low as Bumper Summer Harvest Seen
Wheat Falls to 7 1/2-Year Low as Bumper Summer Harvest Seen
Chicago, Aug. 4 (Bloomberg) -- Wheat futures fell more than 1 percent to
a 7 1/2-year low amid speculation that a bigger-than- expected crop in
the Northern Plains will add to already ample supplies at a time of
sluggish exports.
U.S. farmers harvested 14 percent of the spring-wheat crop as of July
31, up from 3 percent a week earlier and just 1 percent at the same
point a year ago, the U.S. Department of Agriculture said after trading
yesterday. Traders said a quicker- than-expected harvest could mean a
bumper crop. ''We've got good yields in North Dakota, fairly decent
weather and an overwhelmingly negative economic tone right now,'' said
Bill Biedermann, director of research at Allendale Inc. in McHenry,
Illinois. ''The market can't seem to turn around.''
Wheat for September delivery, after the summer harvest, fell as much as
3.75 cents, or 1.5 percent, to $2.47 a bushel on the Chicago Board of
Trade, the lowest intraday price since January 1991.
Wheat prices have plunged 30 percent from a year ago, corn is down 19
percent and soybeans have skidded 16 percent amid expectations for
bumper crops and sluggish demand for U.S. exports, especially to Asia.
Soybeans for November delivery, after the fall harvest, fell 2.75 cents,
or 0.5 percent, to $5.4925 a bushel on the Chicago Board of Trade, a 3
1/2-year low. December corn recently was little changed, falling 0.25
cent to $2.2025 a bushel, the lowest price since November 1994.
Good Condition
U.S. soybean fields, as expected, were in better condition in the week
ended July 31, amid drier than expected weather, the U.S. Department of
Agriculture said. Corn-crop conditions were unchanged, surprising some
analysts who expected an improvement. ''If there was a surprise, it was
the fact that we didn't see much of an improvement in yesterday's crop
report,'' said Dale Gustafson, grains analyst with Salomon Smith Barney
in Chicago. ''But there's enough rain in the forecast to improve
conditions this week.''
Most of the corn crop passed through the pollination stage, when kernels
are formed, which determines the size of the crop, without damage from
heat. Soybeans are in their critical development stage now, and
forecasts for showers this week eased concerns about damage to the crop.
The key Midwest growing states will get as much as 1 inch of rain in
each of the next four days, said Mike Palmerino, meteorologist with
Weather Services Corp. in Lexington, Massachusetts.
In Waterloo, Iowa, which had the lowest amount of July rainfall on
record, more than an inch of rain fell last night, he said. ''These are
very timely rains and beneficial to the crop,'' he said.
Crops probably will need the soil moisture they're getting this week,
forecasters said. High temperatures of 95 degrees Fahrenheit and
below-average rainfall are expected in northern Illinois and northern
Indiana from Aug. 9 to Aug. 13, the National Weather Service said in a
long-range forecast issued after trading yesterday.
No Concern ''There are no signs right now that this heat would be able
to maintain long enough to create concern about the crops,'' Palmerino
said. ''I'd be more concerned about next week's heat if we didn't see
this rain this week.''
An estimated 68 percent of the U.S. corn crop was in good to excellent
conditions as of July 31, unchanged from a week earlier and two
percentage points higher than a year earlier, the USDA said. Ninety-one
percent of the corn has started pollination, the growth stage that
determines the size of the crop.
For soybeans, 65 percent were in good to excellent condition as of July
31, the USDA said, compared with 64 percent a week earlier and 60
percent a year earlier. Almost half the soybean crop has started setting
beans in pods, compared with 30 percent a week earlier and 35 percent a
year earlier.
The USDA projects the autumn soybean harvest at a record 2.83 billion
bushels, up 2 percent from the June forecast, and a corn harvest of 9.63
billion bushels, second largest ever. The USDA on Aug. 12 will release
its monthly crop projection, which traders use to gauge supplies and set
prices.
Elsewhere, soybean meal for August delivery fell as much as $1.20, 0.8
percent, $145.20 a ton, the lowest intraday soymeal price since April
1987. |
