All three U.S. wheat futures markets have moved steadily lower over the past few months and could still have more room to the downside, according to a U.S. analyst.
“It’s been a slow grind into the ground,” said Randy Martinson of Progressive Ag in Fargo, N.D.
U.S. supplies are about average and are not burdensome, he said, but large crops elsewhere in the world, including Canada, were limiting U.S. export opportunities.
With CBOT (Chicago Board of Trade) soft wheat hitting fresh lows again on Thursday, and the Minneapolis and Kansas City hard wheats also trading at their weakest levels in years, Martinson said prices would keep falling until more export demand is uncovered.
“Low prices cure low prices, but we haven’t found that level yet,” he said, although he added that “we’re getting close.”
The U.S. Department of Agriculture will give its first look at winter wheat acres on Friday, with most industry participants expecting a decline in acreage on the year due to the lateness of the corn and soybean harvest.
The reduced new-crop acres should provide some support in the longer run, Martinson said.
U.S. spring wheat area would be relatively unchanged on the year, he anticipated, with reductions in some southern regions but more acres going in the ground in the northern parts of North Dakota, where corn was somewhat disappointing in 2013.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.
U.S. grains: Rising global supply, technical selling hit prices, Jan. 9, 2014