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Reply #21: Wheat Prices Shredded With Near-Record Crop Boosting Reserves: Commodities [View All]

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xchrom Donating Member (1000+ posts) Send PM | Profile | Ignore Thu Dec-08-11 08:10 AM
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21. Wheat Prices Shredded With Near-Record Crop Boosting Reserves: Commodities

The biggest slump in wheat prices in three years may have further to go as expanding harvests from Russia to Canada bolster inventories to the most in a decade.

The U.S. Department of Agriculture will predict tomorrow a 3.4 percent gain in stockpiles to 202.89 million metric tons by June, according to the average of 16 analyst estimates compiled by Bloomberg. Prices that fell 35 percent from a 29-month high of $9.1675 a bushel in February will drop 11 percent more to $5.30 in the next 12 months, Credit Suisse Group AG forecasts.

Global food costs tracked by the United Nations have declined 9.1 percent from a record in February, helping to contain inflation as economic growth slows. Corn and soybeans are also tumbling after farmers responded to record-high prices by planting more crops. Combined output of wheat, corn and soy will jump 3.4 percent to a record 1.8 billion tons this season, 32 percent more than a decade ago, the USDA said last month.

Every country that can plant more corn and wheat has done so, said Alex Bos, the manager of agricultural commodities at Macquarie Group Ltd. in New York. Its an incredible shift, and theres still spare farmland capacity that can be put into production.
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