There doesn’t appear to be anything stopping wheat these days. Demand from hungry nations worried about once-and-future crop losses seems insatiable despite wheat prices well over $8 per bushel — levels never seen in history and more than double the average historical price in the United States.
    In the week ended Sept. 7 the dizzying strength in wheat continued to spill over to other grains. It now looks like U.S. farmers are gearing up to plant much higher acreage of winter wheat this fall — which will take acres away from soybeans and corn when it’s time to plant those crops in the Spring of 2008.
    Bottom line: all eyes will remain on wheat next week, despite the advancing U.S. corn harvest that is certain to yield a bin-busting record crop this year. Nearby CBOT corn prices closed 7-8 cents higher on Friday and soybeans rose 11-12 as CBOT spot wheat rose 24 cents to $8.40.
    For wheat traders, the biggest concern is now the Australian wheat crop which needs rain. The forecast is calling for weekend rains, so that will be a key market indicator traders will be monitoring. Rains were short or absent down under a week ago, spiking CBOT wheat higher.
    The U.S. is the single largest wheat exporter with 29 million tonnes to be shipped in the 2007/08 season. Australia ranks second at 15.5 million tonnes and Canada third at 15 million. But the latter estimates (from USDA) appeared before recent weather-related losses in wheat in those countries.
    “I just don’t think anybody wants to be short Monday morning if they come in and it doesn’t rain in Australia, or Egypt buys some more wheat or India tenders for some more wheat. There’s a lot of little things going on here that is triggering a rally,” Steve Freed, analyst with ADM Investor Services.
    Algeria’s surprise purchase of 500,000 tonnes of wheat, mostly from the U.S. and reported on Sept 6, was the latest demand jolt to buoy wheat prices this week. 
    Traders will gear up for downgrades to production or exports of wheat from overseas producers in next Wednesday’s (Sept 12) monthly U.S. Agriculture Department supply/demand report. The USDA’s latest corn and soybean production estimates will also be released that morning at 0830 EDT (1230 GMT).
    Most are expecting the government to bump up its current corn estimate of 13.054 billion bushels — already an all-time high — as well as its soybean forecast of 2.625 billion bushels. Early harvest reports point to strong corn yields while soybean crop conditions have improved over the past two weeks, which has likely enhanced final yields.
    
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