June 14, 2007

US wheat prices soar to 11-year high on harvest delay

Heavy rains slowing down harvest and reducing yields has pulled up wheat prices to an 11-year high in Chicago on June 12, figures from the US Department of Agriculture show.

Freezing weather on April 7 damaged crops and is now causing some plants to break and fall over in parts of Oklahoma and Kansas, said Mark Hodges, executive director of the Oklahoma Wheat Commission.

The USDA showed five percent of the winter wheat crop was cut as of June 10, compared with 17 percent a year earlier and a five-year average of 10 percent. About 52 percent of the US crop was rated good or excellent on June 10, down from 53 percent a week earlier and the lowest rating of the growing season.

July's wheat futures delivery increased by 9 cents to close at US$5.65 a bushel on the Chicago Board of Trade. Futures jumped 51 percent in the past year after global droughts slashed world production.

Data from the National Weather Service said as much as three times normal rain has fallen from Nebraska to Texas in the past month. Another 1.5 inches or 3.8 centimetres may fall in the region in the next 48 hours and rainfall is expected to be above normal, forecaster Meteorlogix said.

In Oklahoma, 25 percent of the crop was harvested as of June 10 compared with 76 percent a year earlier and a five-year average of 45 percent. , the farm agency said. US' largest wheat state, Kansas, has its production reduced by only 1 percent this year compared with 13 percent cut a year earlier.

Wheat was the fourth-biggest US crop in 2006 with a value of US$7.7 billion, according to government data.