May 10, 2006

US winter wheat crop to be the worst in a decade, price increase expected

Winter wheat crop this year in the US is expected to be the worst in a decade, A.G. Edwards grain analyst Bill Nelson said at the end of a tour through the main wheat-growing states of Oklahoma, Texas, Kansas and Nebraska.

His findings confirms USDA's figures that rated only 10 percent of the wheat crop in the two states at "good to excellent".

Nelson's forecasted production levels of 570 million bushels would be the third time since 1996 that production has fallen below 600 million bushels.

Nelson also noted that wheat prices in some markets are already up nearly 30 percent. If conditions continue to worsen or if the wheat crop in other areas is affected as well, there may be a serious impact for wheat products across-the-board, he said.

While weather patterns remain uncertain, current difficulties with the winter wheat crop would at least lead to mild price increases, Nelson said.