Wheat Prices Drop  

I've mostly done doomer news regarding food prices this year, but it seems the market still has room to respond to price signals, with US farmers increasing wheat acreage and futures prices dropping as a result.

Wheat plunged the most in 10 weeks after a government report showed U.S. growers seeded more acres with spring crops to take advantage of prices that rallied to a record this year.

About 14.197 million acres were sown in April and May, up 6.8 percent from a year earlier, the U.S. Department of Agriculture said today in a report. Analysts surveyed by Bloomberg expected 14.312 million acres. Wheat futures have tumbled 35 percent from a record $13.495 a bushel on Feb. 27. ``When prices get that high, you find every nook and cranny to plant on,'' said Darrell Holaday, the president of Advanced Market Concepts in Manhattan, Kansas. ``This report sets a negative tone for the week.''

Wheat futures for September delivery fell 41 cents, or 4.5 percent, to $8.71 a bushel at 11:37 a.m. on the Chicago Board of Trade. A close at that price would be the biggest drop for a most-active contract since April 18. The price has still gained 50 percent in the past year after adverse weather curbed production in 2007.

Growers are expected to harvest 13.8 million acres of spring wheat in the year that started June 1, up from 12.9 million the previous year, the USDA said. Farmers may seed 63.5 million acres with all varieties of wheat in the year that ends May 31, a 5 percent jump from the prior year, the government said. Production is expected to increase 18 percent to 2.43 billion bushels, or 66.2 million metric tons, in the marketing year, the USDA said on June 10.