Friday, April 25, 2008

Wheat Down 40 Percent from February High


Since the record price of wheat in February, prices have continued to fall as an expected large harvest has caused the golden grain to fall by 40 percent since the $13.50 a bushel record.

On the Chicago Board of Trade (CBOT) soft red winter wheat has plunged to $8.01 a bushel, the lowest since November 2007.

According to the International Grain Council, wheat will probably reach a record harvest of 645 million tons in 2008-09.

"The big rise in prices in 2007 and early 2008 was a strong incentive to increase the planting of wheat," said Sudakshina Unnikrishnan, an agricultural analyst at Barclays Bank.

"The market is pricing-in expectations of a bigger crop from summer onwards."

Government subidies by the U.S. and Europe for corn-based ethanol has been a major contributor to the price increases, as farmers over the last several years have taken acreage out of wheat production and put it into corn.

Wheat farmers will probably be a year too late to get the huge prices, as their huge harvest will cause price decreases, as is already being factored into the market.

1 comment:

  1. Thanks for supporting your time to post such an interesting & useful content.Thank you so much, I appreciate your work.
    Outbound Marketing

    ReplyDelete