December 4, 2008


US wheat prices fall on tumbling grain demand

US wheat prices declined on falling commodities, as the global recession erodes grain demand.


Wheat has dropped 61 percent from a record high in February as consumer spending slowed.


CBOT wheat futures for March delivery fell 1.7 percent or 8.75 cents to US$5.1975 per bushel. The most active contract dropped 41 percent this year, partly because global producers planted more wheat to take advantage of a 77-percent surge in prices last year.


From June 1 to November 20, importers committed to purchase 20.5 million tonnes of US wheat, down 27 percent on-year, according to the USDA. Actual shipments totalled 15.7 million tonnes, down 14 percent, the government said.


COFCO, China's largest grain trader, bought a cargo of US wheat after falling prices made the grain competitive. The purchase, which may exceed 50,000 tonnes, was China's first major order of US wheat this year.


Importers have turned away from US grain this year, as rival exporters offered better prices.


Egypt, a large wheat importer, purchased 120,000 tonnes of Russian wheat at US$163 per tonne and 120,000 tonnes of French wheat at US$171 per tonne on Tuesday (Dec 2, 2008).


US soft red-winter wheat was sold for US$172 per tonne in New Orleans port on Wednesday (Dec 3, 2008), said the USDA.


Wheat is the fourth-largest US crop, valued at US$13.7 billion in 2007.

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