In the first hard news about the United States winter wheat acreage, no news was good news.
On Jan. 12, wheat prices rose 24 cents per bushel on the Kansas City Board of Trade March hard red winter wheat contract after the United States Department of Agriculture found 44.1 million acres seeded to winter wheat. That acreage was up from 40.6 million last year but well below the increase some analysts had expected.
Oklahoma State University wheat market analyst Kim Anderson said wheat got a free ride on the news about corn from the USDA.
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The department dropped its 2006 corn production to 10.54 billion bushels from 10.75 billion, and lowered its corn ending stocks estimate for
2006-07 to 752 million bu.
Last year corn ending stocks were about two billion bu., and the year before they were 2.1 billion.
Corn prices shot up in response, dragging almost all other major North American crop prices with it. That phenomenon is likely to continue.
“Unless the corn crop is significantly higher than expected, corn prices should remain relatively high and corn prices should support wheat prices,” said Anderson.
“The market is offering $4.60 (US per bu.) for harvested, delivered wheat. I do not expect wheat prices to fall much below this level.”
Corn’s power was evident in wheat’s strength, with the market shrugging off news that in other times might have given wheat prices a boot downward.
USDA cut its wheat export projection by 25 million bu. and raised 2006-07 wheat ending stocks by 34 million bu.
