WASHINGTON - Drought in the Great Plains will limit the US wheat crop to 1.806 billion bushels this year, the government forecast on Wednesday, but the farm-gate price for wheat and corn will be the highest in a decade.
With the wheat crop down by 299 million bushels from last year, tighter supplies will push the average price to US$4 a bushel, the highest since 1996/97.
Voracious demand for corn, including the booming ethanol industry, will mean an average price of US$2.45 a bushel, also the highest in 10 years.
But soybean prices were projected to average US$5.50 a bushel, down 10 cents from last month's estimate. USDA said "forward pricing opportunities for new-crop soybeans have remained at substantially lower price levels than in the two previous marketing years."
The US wheat crop would be the smallest in four years while this year's soybean crop, projected for 3.01 billion bushels, would be the third largest on record. At 10.74 billion bushels, the corn crop would be the fourth-largest ever.
Cotton was projected at 20.50 million bales weighing 480 lbs (218 kg), the third largest.
Winter wheat -- planted in the fall and harvested the following spring -- was estimated at 1.28 billion bushels, 15 percent smaller than the preceding crop. In its first forecast of the spring-planted crop, USDA pegged durum wheat at 60.4 million bushels, down 40 percent from 2005 for the smallest crop since 1988, and other spring wheat at 465 million bushels, down 8 percent.
REUTERS NEWS SERVICE
