Wheat Prices CBOT jump 34 percent

Wheat prices on the Chicago Board of Trade, the global benchmark, have jumped 34 percent this year, the best performance among 24 commodities on the Standard & Poor’s GSCI Index. The December contract gained 1.2 percent to $8.7875 a bushel at 9:24 a.m. local time. In Paris, milling wheat for January delivery rose 1.2 percent to 261.50 euros ($340.71) a ton, after earlier touching 262.25 euros, the highest in a week.

Traders should be “cautious” when signing wheat export contracts, Bisyuk said in an e-mailed statement after today’s meeting, stopping short of saying the government plans to implement official restrictions. Ukraine had exported 7.1 million tons of grain this season, as of Oct. 16, he said.

“Ukraine just doesn’t have enough grain to continue the pace for the rest of the season,” Matt Ammermann, a risk management consultant with INTL FCStone Inc. in London, said by phone today. “It seems like the market has been talking about this for a while. The government has been addressing the situation over the past few months, so I don’t think it catches the market too much by surprise.”

Global inventories of wheat, soybeans and corn may drop to 347.8 million tons by the end of the 2012-13 season, according to the USDA, a five-year low, as dry weather cut crop yields from the U.S. to Europe to Australia.

Wheat Inventories Fall, Wheat Futures May delivery Rose

Wheat inventories as of March 1 fell 16 percent to 1.201 billion bushels from a year earlier. The average estimate by analysts in the Bloomberg survey was 1.25 billion.

Wheat futures for May delivery rose 7.9 percent to settle at $6.6075 a bushel in Chicago, the biggest gain since Oct. 11. Most-active futures rose 1.2 percent during the past three months.

On the Minneapolis Grain Exchange, spring-wheat futures jumped the most in 10 months after the USDA said farmers will cut plantings to seed more corn, soybeans, barley and other crops.

Spring-wheat planting will fall to 11.976 million acres from 12.394 million a year earlier, the agency said. Analysts projected 13.35 million, on average.

“People expected more spring-wheat planting, and farmers say they want to plant other crops,” Dave Marshall, a farm- marketing adviser at Toay Commodity Futures Group Inc. in Nashville, Illinois, said in a telephone interview. “That’s a sign that prices are not high enough to compete.

Wheat Prices 2012 Tumble, March Delivery Fell 36 cents

Wheat prices 2012 tumbled as a government report showed the nation’s farmers had planted winter wheat on much more of their land this season amid last year’s higher prices and easing drought conditions in Kansas, Oklahoma and Texas. Farmers and agricultural analysts had anticipated that more acres would be used for winter wheat given the welcome precipitation last fall and the acres left idle after other crops failed this summer. But Kansas State University economist Dan O’Brien said most analysts had not expected that the amount of acreage planted would increase so much.

Wheat prices in major western European markets were flat to slightly higher on Monday as export-boosting weakness in the euro offset pressure from pre-weekend falls in Chicago, and with a holiday closure in U.S. markets keeping activity light.

At the Chicago Board of Trade, wheat for March delivery fell 36 cents to $6.05 a bushel. The longer-term impact on prices will be determined when it is clear if all those extra acres turn into increased production and whether dry conditions return in the spring when the wheat comes out of dormancy.

Across the country, the amount of winter wheat planted for harvest in 2012 was estimated at 41.9 million acres, the National Agricultural Statistics Service reported Thursday. That is an increase of 3 percent from 2011 and up 12 percent from 2010.

Kansas farmer Jerry McReynolds, who has roughly 2,300 acres now planted in winter wheat, says that like many others, he added several hundred acres at his farm near Woodston because of the good prices and because some acres were idle after other crops failed this summer.

The rain Kansas got this fall also encouraged him to plant more winter wheat, which is hardier in the face of drought.

“All those factors came together to cause us to plant more wheat and we may pay the consequences,” McReynolds said. “We don’t know about that — certainly if today is an indication ... the markets are not too good today.”

McReynolds, who was attending the American Farm Bureau board meeting in Honolulu, had been anxiously awaiting the government report and checked commodity market prices on his hand-held device throughout the day. “I am worried about the price of wheat because when I get home I am gonna pay for this,” McReynolds said.

O’Brien said if farmers get adequate rain or snow, those added acres would mean more bushels come harvest that would increase supplies and could lower crop prices.

“There is a lot of uncertainty and weather trends in place that really raise the question of whether that will happen,” O’Brien said. “I don’t think we can say that is going to happen yet with a lot of certainty.”

The La Nina weather pattern is still hanging around and that tends to mean drier conditions this spring in wheat-growing areas, he said.

Texas Panhandle wheat farmer David Cleavinger, a past president of the National Association of Wheat Growers, is in a holding pattern on what he’ll do with the 1,200 acres of winter wheat he planted a bit late last fall because of the state’s historic drought. Though they have gotten timely rains and some snow the past few months, the wheat plants are “really, really small” in height, he said.

“There’s enough moisture for it right now, but there’s no submoisture whatsoever,” Cleavinger said. When the wheat comes out of dormancy, “it’s going to need more moisture. We keep hoping we get an 18-inch snow storm. It will be OK if we get more rain.”

As he waits, Cleavinger will be considering what to do with the wheat he ends up with: He can sell it as grain, sell it to cattle feedlots as silage made from wheat, cut it and sell it for hay at a time in Texas when there is little supply and prices are high — as much as $250 a ton — or let cattle graze in his fields.

“Odds of hay prices being pretty good should be an advantage for us to take it for hay rather than taking it to grain,” Cleavinger said. “It all is tied back to weather and rain. So if you don’t have moisture, you don’t have those options.”

Using his wheat for hay would be less risky, he said, because it wouldn’t still be in the fields when spring storms can bring damaging hail.

Hard red winter wheat, the type used for making bread, accounts for the vast majority of the nation’s winter wheat acreage. It rose 6 percent to 30.1 million planted acres.

Kansas, known as the nation’s breadbasket, planted 9.5 million acres, an 8 percent jump. Texas planted 5.9 million acres, up 11 percent from a year ago. Oklahoma seeded 5.5 million acres, an 8 percent increase.

Plantings of soft red winter wheat and white winter were both down nationwide.

“What it indicates is more hard red winter wheat planted,” O’Brien said. “I don’t know if we can say with a lot of confidence that will necessarily result in higher production until we work our way through this spring uncertainty.”

Europe

* The euro rose following a 17-month low against the dollar on Friday, when credit rating agency Standard & Poor's downgraded nine euro-zone countries, including France, but stayed below $1.27, partly due to stalled talks on Greece's debt.

* A softening euro helped European milling wheat in Paris stay in positive territory on Friday, even as Chicago crop futures fell sharply on a corresponding rise in the dollar plus improving crop weather in Argentina.

* March milling wheat closed up 1.25 euros or 0.63 percent at 198.25 euros a tonne. It continued to face resistance around 200 euros, with a key level seen at 203.50 euros, the peak of a rally at the turn of the year.

* "Our competitiveness has been reinforced, as shown by sales secured with Egypt and probably Algeria," French grains consultancy Agritel said in a note. "The impact of the price fall in Chicago is thus being limited by the euro factor and this could continue this week."

* French wheat scored its third straight tender sale to Egypt on Friday and was also seen as in contention to claim part of a major purchase by Algeria last week.

* The upturn in French exports has also been supported by a flagging pace of shipments from Russia after it dominated the early part of the season.

* In other export news, Tunisia issued an international tender to buy 125,000 tonnes of durum wheat.

* Weather worries in big exporting countries may provide broad support this week to grains, after they were dented last week by bigger-than-expected supply estimates from the U.S. government and by forecasts for improved crop weather in Argentina.

* A drought in Argentina will worsen this week as rain will not be enough to revive parched corn and soy crops, local meteorologists said.

* Colder weather in France since the end of last week was not seen as threatening crops as temperatures were not severe enough, with the cold rather seen as potentially beneficial for strengthening plants after mild conditions since the autumn.

* In oilseeds, rapeseed futures were little changed, with February closing down 0.50 euros or 0.11 percent at 450.00 euros a tonne.

* The weak euro and tight supply in Europe helped rapeseed hold up better last week than their lead market, U.S. soybeans, which were hit by bearish U.S. government estimates and the return of rain to drought-hit Argentina.

GERMANY

* Germany's market was little changed on late Friday levels, with support coming from a stable Paris market, export-boosting weakness in the euro and firm feed wheat demand.

* Standard bread-quality milling wheat for January delivery in Hamburg was offered for sale unchanged at 202 euros a tonne with buyers at around 200 euros.

* "The weaker euro will make the export outlook more positive at a time when competition from rivals like Argentina is flagging," one trader said. "But the lack of a lead from U.S. markets today means some people are restrained in trading."

* Short covering by animal feed makers was keeping German feed wheat prices at the same level or even higher than milling wheat, continuing a pattern seen last week.

* Feed wheat for delivery up to June in the South Oldenburg market near the Netherlands was offered for sale at 203 euros a tonne with buyers around 201 euros.

* "The new year holiday season in the Black Sea region has kept sales offers of feed wheat low, which seems to be keeping spot demand for feed wheat high," another trader said. (Reporting by Gus Trompiz and Valerie Parent in Paris and Michael Hogan in Hamburg; Editing by Anthony Barker)

U.S. farmers, the world’s biggest wheat exporters, probably planted the most winter grain in three years, expanding acreage from a century-low reached in 2009 just as a global supply glut swells to its biggest in a decade.

About 41.02 million acres, an area bigger than Illinois, were sown from September to November, 0.9 percent more than a year earlier, according to the average of 16 analyst estimates compiled by Bloomberg. That will add to world inventories set to rise 4 percent to 207.7 million metric tons, the most since 2000, the survey showed. Winter wheat makes up 74 percent of the U.S. crop, and the government gives its first estimate tomorrow.

Wheat traded in Chicago fell 30 percent from a 29-month high in February as a 47 percent surge in 2010 spurred more planting. That helped global food prices tracked by the United Nations drop 9.6 percent from a record, easing costs that drove global inflation higher. The second most widely held option gives owners the right to sell wheat at $6 a bushel by February, 6.4 percent lower than now, Chicago Board of Trade data show.

“We have ample supplies of wheat, and we just keep on producing more,” said Shawn McCambridge, the senior grain analyst at Jefferies Bache Commodities LLC in Chicago, who anticipates declining prices. “We’ll need normal-type weather conditions this spring, but in general, we’re going over the winter without really much of a dramatic concern.”

Trailing Equities

Wheat prices are down 1.8 percent this year, closing at $6.41 at 1:15 p.m. today in Chicago. Its 18 percent decline in 2011 was worse than the 1.2 percent retreat in the Standard & Poor’s GSCI Total Return Index of 24 commodities. The MSCI All- Country World Index of equities fell 9.4 percent and Treasuries returned 9.8 percent, a Bank of America Corp. index shows.

The S&P GSCI Agriculture Index of eight farm commodities tumbled 15 percent last year as slowing economies hurt demand for everything from cotton to soybeans. The gauge rose 44 percent in 2010 as drought decimated crops from Russia to Australia. At the end of 2009, the U.S. planted 37.33 million acres of winter wheat, the fewest sown since the fall of 1912, as excessive rains swamped fields from Ohio to Illinois.

Russian wheat farmers, once the world’s second-biggest producers, reaped 35 percent more last year than in 2010, recovering from the worst drought in more than 50 years, the U.S. Department of Agriculture estimates. Ukraine’s output jumped 31 percent, supply rose 9 percent in Canada and Australian production gained 1.5 percent to a record, according to the USDA. India, the largest grower after China, harvested its biggest crop ever.

Futures Trading

Hedge funds and other money managers have been betting on lower wheat prices since mid-September, having been mostly bullish since July 2010, data from the Commodity Futures Trading Commission show. They are holding a net-short position, or wagers on a decline, of 27,097 futures and options, compared with a net-long position of 51,787 contracts in February.

Growth in world demand this year may still exceed the 4 percent anticipated by the USDA, driving prices higher, as farmers substitute more for corn in livestock feed. Wheat is trading at a 12.25 cent-a-bushel discount to corn, compared with a premium of about $1.78 over the past five years, data compiled by Bloomberg show. Feed use for wheat will rise 16 percent this year, almost 12 times the rate of expansion in food use, the USDA estimates.

Corn rose 13 percent to $6.515 a bushel since Dec. 15 on mounting concern that dry weather is hurting crops in Brazil and Argentina, historically the largest exporters after the U.S. The lack of rain may spur more damage than the 2008-2009 drought that was the worst in 70 years, the Argentine Association of Regional Consortia for Agricultural Experimentation said Jan. 6.

‘Bearish’ Fundamentals

“Wheat is competitive as a feed grain with corn, so as corn goes, so goes wheat,” said Dan Manternach, a wheat economist with researcher Doane Advisory Services in St. Louis. “The fundamentals for wheat itself are bearish.”

Prospects for U.S. winter wheat have improved, with parts of Kansas, Oklahoma and Texas, the biggest producing states, getting three times the normal rainfall in the past 30 days, according to the National Weather Service. That is compensating for last year’s drought, the worst on record for Texas. Some areas of the Plains had half the normal rain in 2011.

Winter wheat is grown from the Midwest to the Great Plains, goes dormant until about March and is harvested from May.

Farmers “think we’re in far better shape than we were last year,” said Bill Spiegel, a spokesman for Kansas Wheat, a state growers group. “Last year, we didn’t have any moisture and the crop hadn’t really emerged. We’ve seen this year’s crop is up, and it went into dormancy in really good shape.”

Top Ratings

As of Jan. 1, 53 percent of the winter wheat in Kansas, the biggest growing state, was in good or excellent condition, compared with 47 percent a month earlier, the USDA said Jan. 3. In Oklahoma, 63 percent got the top ratings, up from 56 percent.

“We have good moisture in the top soil, but the subsoil is not as full as we’d like,” Paul Penner, a farmer in Hillsboro, Kansas, said in a telephone interview. “It looks great right now. But when it breaks dormancy in our area in late February and early March, that’s when it’s going to be critical that we get the rain we need as the temperatures rise.”

In Texas, about 25 percent of the crop was in good or excellent condition as of Jan. 8, unchanged from the end of November, the USDA said. Still, more fields were rated fair, and less were very poor, the worst rating.

Some farmers increased planting amid last year’s dry weather because government-subsidized crop-insurance rates set in September, based on futures prices, allowed them to lock in profits, Manhattan, Kansas-based Spiegel said.

“I’m bearish on wheat prices now on into harvest,” said Mark Welch, an agricultural economist at Texas A&M University in College Station, who expects prices in Chicago may drop as low as $5.75 by July. “Wheat is a resilient crop. If you give it a little rain to help it along, it’s surprising what it will do.”

Future Wheat Prices Advance as Slow Exporter from US

Future wheat prices advance as wet weather in the Great Plains will slow the harvest in the U.S., the world?s leading exporter, about 44 percent of the winter crop was harvested as of June 26, ahead of the five-year average of 37 percent, according to the U.S. Department of Agriculture. The agency will issue an update later today.

Wheat futures for September delivery rose 23.25 cents, or 3.8 percent, to settle at $6.355 a bushel at 1:15 p.m. on the Chicago Board of Trade. Last week, the price tumbled 7.4 percent, the fifth straight decline, amid signs of higher global production.

Parts of Kansas, the biggest U.S. winter-wheat growing state, may have thunderstorms with as much as 1.5 inches of rain (3.8 centimeters) for two days starting tomorrow, said Joel Widenor, the director of agricultural services at the Commodity Weather Group LLC in Bethesda, Maryland. Some areas in Nebraska may get as much as 4 inches of rain in the period, he said.

?You?re getting quite a storm system over northern Kansas and southern Nebraska,? said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio. ?It?s going to delay the harvest.?

Wheat Prices Advanced due Low Stocking Levels in EU and Deteriorating US Crop Conditions

Wheat prices look set to soar to record levels this year due to anticipated low stocking levels in the European Union, the world?s largest wheat producer.

Industry experts predict the price will remain high for the remainder of 2011. Milling wheat traded on the NYSE Liffe exchange in Paris, the European benchmark, averaged ?252.20 a ton in the first quarter, the second highest price since 1999. It fell by around 1% to ?238 yesterday, but looks sure to trade at ?220 to ?250 over the next year.

French agri-analysis firm Offre et Demande Agricole is advising its 5,000 French farm members to sell crops, according to Bloomberg. Prices may reach ?300 should crops fail in one of the bigger producers, it advises.

France?s crops office, FranceAgriMer, has increased its estimate for soft-wheat exports outside the EU in the 12 months to June to 12.75m tons from 12.6m tons.

Meanwhile, the US Department of Agriculture predicts global wheat stockpiles will drop 7.6% to 182.8m tons at the end of the 2010-11 trading year.

Rain last autumn slowed the planting of winter wheat, which accounts for 95% of the EU?s wheat crop, leaving acreage little changed from a year earlier.

While better yields will boost output by 5% to 141.4m metric tons, that may not be enough to rebuild the EU?s stockpiles, which its experts estimate will slump by 19% before the end of June.

The European farmer representative group Copa-Cogeca, of which the Irish Farmers Association is a member, said that this wheat shortfall serves to remind food producers of the importance of independence of food security for the EU?s 27 member states.

Meanwhile, Copa-Cogeca also noted that a newly published EU report on nitrogen emissions similarly highlighted the need to keep food security to the forefront in the continent?s future environmental strategy.

The EU report highlights the vital contribution of nitrogen to agricultural productivity and to maintaining EU food security. The farm group said that this issue is more important than ever given that world food demand is expected to more than double by 2050.

Copa-Cogeca secretary-general, Pekka Pesonen, said: "This study confirms that food security is crucial for Europe and that the only way to achieve this is to support an efficient, productive agriculture sector.

"The report also shows that the agriculture sector is much further ahead than other sectors in reducing its green house gas emissions, with a 20% fall in emissions seen in the EU agriculture sector over the period 1990 to 2007.

"Some 70% of nitrogen emissions, which have been identified as the most costly to society, come from transport and heating," he added.

"Furthermore, Copa-Cogeca EU farmers have reduced fertiliser consumption by 18% from 2002 to 2010. But in order for this to continue, European farmers need access to all technologies which improve their production efficiency. At the same time, EU farmers are being squeezed by high input prices and extreme market volatility.

"This will limit the amount of investment European farmers put into improving their business. The Common Agricultural Policy must provide a good economic framework for a modern, efficient agriculture to tackle also the nitrogen challenge."

Wheat rose for a third day in Chicago as worsening winter-crop conditions in the U.S., the largest exporter, and delayed spring-crop plantings fueled supply concerns amid strengthening demand.

About 38 percent of the winter-wheat crop was in poor or very poor condition as of April 17, up from 36 percent a week earlier and 6 percent a year earlier, the U.S. Department of Agriculture said yesterday. Dry weather in the past week from central Kansas to Texas hurt crops. About 5 percent of the spring-wheat crop was sown, against 18 percent a year earlier and the prior five-year average of 12 percent, the USDA said.

?Wheat prices rose sharply on the news of the slow spring- wheat planting and on the further news that the condition of the current winter-wheat crop is really quite bad,? economist Dennis Gartman said in his daily Gartman Letter.

Wheat for July delivery gained 12.75 cents, or 1.6 percent, to $8.235 a bushel by 10:54 a.m. London time on the Chicago Board of Trade. Prices reached a one-week high of $8.2475 after jumping 3.9 percent yesterday. Milling wheat for May delivery traded on NYSE Liffe in Paris climbed 6.25 euros, or 2.5 percent, to 252.25 euros ($360.01) a metric ton.

Wheat output in Texas, the fifth-largest U.S. grower, may plunge 61 percent to 50 million bushels as the dry spell damages plants and farmers abandon fields, said Mark Welch, a grain- marketing economist at Texas A&M University. About 68 percent of the Texas winter-wheat crop was in poor to very poor condition, the USDA said yesterday.

Yields in the U.S. may drop to 38 or 39 bushels an acre, the lowest since 2006, without improved weather conditions, said Dennis Delaughter, owner of Progressive Farm Marketing Inc. in Edna, Texas. The national yield has been below 40 bushels only twice in the past 13 years, USDA data show.

Wheat inspected for export at U.S. ports rose 24 percent from a week earlier to 35.7 million bushels in the week to April 14, the USDA said yesterday.

Corn for July delivery rose for a second day in Chicago, advancing 1.75 cents, or 0.2 percent, to $7.6125 a bushel. Sowing of the grain in the U.S., the largest grower and exporter, fell behind last year?s pace.

About 7 percent of the corn crop was planted as of April 17, down from 16 percent a year earlier, the USDA said yesterday. At least a third of the crop should be sown by May 1 or yield potential may be diminished, said Greg Grow, director of agribusiness for Archer Financial Services Inc. in Chicago.

Soybeans for July delivery fell 2.5 cents, or 0.2 percent, to $13.5325 a bushel after two advances in a row. China?s soybean crushers canceled more than 10 cargoes of the oilseed this month to cut growing losses for processing, state- affiliated researcher Grain.gov.cn said in a report today.

Crushers have also delayed shipments of more than 20 cargoes, it said. The cancellations and delays will likely lower China?s imports in the year through Sept. 30 to about 53 million tons, compared with 57 million tons estimated by the USDA, the researcher said. The Asian country is the world?s biggest soybean importer.

Wheat Prices Surge as African and Mideast Unrest Make Speculators Gone

Wheat commodity as grain, has prices surged as North African and Middle East nations bought more shipments to damp a surge in domestic prices that helped spark the protests from Morocco to Bahrain. Speculators including hedge funds last week cut their bets on higher wheat prices by 20 percent, U.S. Commodity Futures Trading Commission data show.

Wheat for May delivery fell 9 cents, or 1.1 percent, to $7.8925 a bushel on the Chicago Board of Trade, as of 9:26 a.m. in London. Corn for May delivery retreated 5.75 cents, or 0.8 percent, to $6.965 a bushel and soybeans dropped 16.75 cents, or 1.3 percent, to $13.1475 a bushel.

North Africa and Middle East countries are expected to buy 39.3 million metric tons of wheat in the 2010-11 marketing year, accounting for 32 percent of world purchases, U.S. Department of Agriculture data show.

Wheat extended a collapse and corn and soybeans also fell as traders speculated that a jump in energy costs caused by protests across North Africa and the Middle East will curb growth and demand for grains.

Riots already ousted leaders in Egypt, the world?s biggest wheat importer, and in Tunisia, and opposition groups have seized control of eastern cities in Libya. While wheat traded in Chicago dropped 10 percent since Feb. 18, crude oil traded in New York jumped 18 percent.

?Everyone has been bullish corn and wheat for an extended period,? Michael Pitts, commodity sales director at National Australia Bank Ltd., said by phone from Sydney today. The unrest in North Africa and the Middle East meant ?they really ignored some positive fundamentals and sold off.?

The Standard & Poor?s GSCI Agriculture Index of futures doubled since July and the United Nations says global food prices reached a record last month. The U.S., the biggest exporter, is forecasting a 49 percent jump in its shipments in the 12 months ending in June, the most in 18 years.

Hedge fund managers and other speculators held a net-long position, or bets on higher prices, of 34,193 contracts by Feb. 15. A week earlier, they held 42,635 contracts, the most since 1997, according to data from the CFTC.

?It?s not surprising to see the declines because of increasing risk aversion in the market,? said Eugen Weinberg, Frankfurt-based head of commodity research with Commerzbank AG. ?Gold is inching higher and oil is definitely experiencing some inflows.?

Future Wheat Prices Rise on Countries Boost Inventories

Prices wheat futures rose to a 29-month high on signs that countries are boosting grain inventories after food inflation spurred unrest in North Africa. Wheat futures for March delivery rose 15.5 cents, or 1.8 percent, to $8.745 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the price touched $8.8075, the highest for a most-active contract since Aug. 25, 2008.

Egypt, the world?s biggest importer, bought 55,000 metric tons from the U.S. in a tender on Feb. 5. Iraq, Turkey, Bangladesh and Algeria have issued tenders since Feb. 6, and Iran and Saudi Arabia may be in the market ?soon,? the CME Group Inc. said in a report on its website.

?We had all these tenders that showed up over the weekend,? said Jeff McReynolds, the owner of McReynolds Marketing and Investments in Hays, Kansas. ?It still shows a lot of demand showing up in the world market, and it hit all at once.?

Prices surged 81 percent in the past year as drought slashed supplies in Russia and floods eroded crops from Canada to Australia. Tens of thousands of Egyptian protesters have rallied in the streets, chanting that the government is ?illegitimate? as surging food costs and high unemployment sparked unrest.

Wheat was the fourth most-valuable U.S. crop in 2009 at $10.6 billion, behind corn, soybeans and hay, government data show.

German wholesale prices have surged back to the peak they reached in July 2008, nearly three years ago before the worldwide financial crisis, statisticians said Friday.

In related news, German farmers say they have already sold about half the wheat they expect to harvest in August.

Millers are buying the wheat in advance to beat the rush as world commodity prices race ahead. The farmers reported the sales in a survey by an national agricultural research organization, DLG, based near Frankfurt.

DLG markets tracker Mechthilde Becker-Weigel said wheat futures were now back to the record level of 2008 on the back of high demand from North African nations and China and a slump in Russian exports.

The Federal Statistics Office said overall wholesale prices paid by merchants and industry in Germany had jumped 1.2 per cent, month on month, in January, and were now equal to the old, 2008, record.

Grain, seeds and fodder were the fastest-rising price group, up 71 per cent in the space of a year, the statisticians said.

Agriculture Market Outlook 2011: Wheat Future Prices Fall

Wheat futures fell the most in six weeks on speculation that snow in the U.S. Great Plains will improve soil moisture and provide protective cover over crops before temperatures drop.

Areas of northwest Kansas may receive up to 6 inches (15 centimeters) of snow by tomorrow, while southwest to north- central Nebraska may get up to 8 inches, according to National Weather Service forecasts. Much of the area has had less than half of the normal amount of precipitation in the past 60 days. Temperatures may drop to minus 10 Fahrenheit (minus 23 Celsius), according to World Weather Inc.

The storm ?probably will provide some snow cover before the cold weather comes across,? said Louise Gartner, the owner of Spectrum Commodities in Beavercreek, Ohio.

Wheat futures for March delivery fell 19 cents, or 2.4 percent, to $7.8025 a bushel at 10:30 a.m. on the Chicago Board of Trade. A close at that price would be the biggest decline since Nov. 16.

Before today, prices jumped 48 percent this year as adverse weather cut production in Russia and threatened crops in Australia and the U.S.

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

With prices high and exports strong, the outlook for Montana's wheat harvest is golden.

Lola Raska of the Montana Grain Growers Association says people in the industry were in a good mood as the state's largest grain group wrapped up its convention in Great Falls last week.

Cash prices for wheat have ranged from $6.49 a bushel for ordinary winter wheat to $10.15 for high-protein spring wheat. Six months ago, the average price was less than $5 a bushel.

Russia and Ukraine has suspended grain exports because of drought and Australia finished the year reporting a 1 million ton cut in wheat exports.

Montana wheat farms have produced 215.36 million bushels of wheat this year, despite planting 80,000 fewer acres than the year before, according to the National Agricultural Statistics Service.

Chicago wheat futures rallied from a 2-week low as Russia extend bans on grain exports while corn and soybeans continue their falling trend amid stronger U.S. dollar and favorable weather.

The most active wheat contract for December delivery gained two cents, or 1.2 percent, to 6.7075 U.S. dollars per bushel. December corn slid 4.15 cents, or 0.8 percent, to 5.6 dollars per bushel. November soybean shed two cents, or 0.17 percent, to 11.995 dollars per bushel.

Russia, one of the worlds'largest wheat exporters, extended its export ban on grain to July 1, 2011, Prime Minister Vladimir Putin said on Friday, which has triggered robust rally in the wheat market.

The country said in August it would halt exports until the end of this year due to reduced grain production amid severe drought, which pushed the wheat market on the hiking track. The wheat price has surged around 40 dollars since the end of July.

Wheat Prices Gains per Quintal On Weak Sowing Progress in North India

Wheat prices gained more than Rs15 per quintal in last two days triggered by weak sowing in major growing states such as Punjab and Haryana coupled with strong offtake by flour millers in domestic market .

As per latest data by Ministry of Agriculture, wheat has been sown in 70.75 lakh hectare area as on 19th November against 101.62 lakh hectare during corresponding period last year, down 30.37%. This was mainly due to delayed harvesting of sugar cane crop in Uttar Pradesh. However , government is targeting 82 million tonne of wheat in the ongoing rabi season.

As per latest crop report , current weather in Maharashtra, Karnataka and Tamil Nadu is favourable for the germination of the crop. Sowing in Punjab and Haryana is in the last phase whereas it is picking up in the states like Uttar Pradesh and Rajasthan. Rainfall over east Uttar Pradesh and Madhya Pradesh will increase the crop yield due to good moisture. Government officials suggested that wheat sowing in major producing areas are expected to be completed by the end of November

Prices were also supported by strong millers demand. The spot prices of Desi wheat increased by almost Rs20 per quintal in last two trading days due to constant demand of flour millers and traders. The spot prices of Desi - wheat delivery was quoted at Rs 1,240-45 per quintal.

Consequently, the future prices of wheat NCDEX December Benchmark contract increased by Rs15 per quintal in last two days and were trading at Rs1302 per quintal.

Wheat Consumption Growth in China Corn Commodity Stay

China consumption of wheat growing while corn stay self-sufficient in corn and the autumn harvest will probably increase, so corn commodities imports may grow, the increase will not be significant, China will keep policies to support wheat and corn farmers and maintain controls on the domestic grain market.

Corn futures advanced 18 percent in Dalian in the past year and wheat prices increased 25 percent in Zhengzhou. China imported the most corn in 14 years and sold 13.7 million metric tons from stockpiles in the north of the country. The government may not replace all the corn sold from inventories, Zeng said today. Heavy rain and low temperatures have hurt corn, wheat and rice crops, contributing to gains in local prices.

China government is determined to curb excessive speculation and hoarding. While corn consumption will increase, supply and demand is balanced and price gains aren?t justified, she said. Corn for May delivery advanced 0.4 percent to 2,046 yuan ($304) per ton on the Dalian Commodity Exchange today. The most active contract climbed to 2,070 yuan per ton on Sept. 8.