Grains Oilseeds

[KastelCo]

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Old crop is now being offered at a price below new crop. That is quite a change this year. In fact, soft white wheat is fifty percent down from its high. A fifty percent retracement in any hard commodity would be front page news.


From Bloomberg

Wheat Falls on Improved U.S. Crop Condition Outlook; Rice Drops
By Tony C. Dreibus

April 21 (Bloomberg) -- Wheat fell to the lowest price since November on speculation that a government report later today will show U.S. crop conditions improved in the past week because of more favorable weather. Rice also declined.

Rain fell in western Kansas, and areas from Arkansas to Ohio had dry weather after flooding in some fields. A U.S. Department of Agriculture report last week showed 47 percent of winter wheat was in good or excellent condition, and seeding of spring varieties increased. The USDA will release the latest weekly crop-status report at 4 p.m. Washington time.

``Some guys are looking for better wheat conditions,'' said Clark Neighbors, a commodities broker at Bump Investor Services in Cedar Rapids, Iowa. ``It'll be interesting to see what planted numbers they put out.''

Wheat futures for July delivery fell 25.5 cents, or 2.9 percent, to $8.595 a bushel on the Chicago Board of Trade, after earlier touching $8.41, the lowest for a most-active contract since Nov. 27.

The price has dropped 36 percent from a record $13.495 a bushel on Feb. 27. Wheat still is up 71 percent in the past year.

The spring-wheat crop was 8 percent planted as of April 13, compared with 6 percent a year earlier, the government said last week. The pace is expected to stay ahead of last year's, Neighbors said. Still, the agency report showed seeding was behind the five-year average of 12 percent.

Canada Planting

Prices also may be declining after Canada said today that farmers there will increase fields sown with wheat by 16 percent to 25.1 million acres this year. Spring-wheat seeding will rise 9 percent to 16.6 million acres and planting of durum, a high- protein variety used to make pasta, will increase 23 percent to 5.9 million acres, Statistics Canada reported.

Global wheat stockpiles were forecast by the USDA to decline to the lowest in 30 years in the year through May. Wheat was the fourth-biggest U.S. crop in 2007, valued at $13.7 billion, behind corn, soybeans and hay, government data show.

The USDA said today it inspected about 22.4 million metric tons of wheat for export in the week ended April 17, up 57 percent from the 14.3 million the prior week.

In another grain market, rice futures in Chicago fell for the first time in six sessions as Thailand, the world's largest exporter, said it has enough of the grain to meet demand in Hong Kong. Production in Thailand may also increase supply of the grain in the next two months, analysts said.

Added Supply

``We know there's going to be some rice grown in Thailand, so we may have some added supply by June,'' said Dennis Delaughter, owner of Progressive Farm Marketing Inc. in Edna, Texas, in a Bloomberg Television interview today. ``At some point, the price is going to shake loose some of this rice. There's going to be some supply that's going to come on.''

Futures for July delivery fell 37 cents, or 1.5 percent, to $23.70 per 100 pounds in Chicago. The price more than doubled in the past year on supply concerns. Declining global output and higher prices have led some nations to curb exports.

The price may also have fallen because the Philippines said it would release rice in emergency stockpiles to consumers to curb food prices, Delaughter said.

To contact the reporter on this story: Tony C. Dreibus in Chicago at [e-mail].

Last Updated: April 21, 2008 15:42 EDT