Commodities: Wheat Prices Drop Three-week Low

Wheat prices fall as commodity grain production increases

Wheat for December delivery dropped to $5.372 a bushel today on the Chicago Board of Trade, as global production has increased significantly, and India announced it would be offering 2 million tons of wheat to its neighbors, putting more downward pressure on the worldwide market. That's the lowest price level in three weeks.

The U.S. Department of Agriculture report on export sales data is expected to confirm these facts, and wheat could fall even more.

Wheat exports for the week ending October 30 are down a huge 40 percent from the week ending October 23, falling to 13.2 million bushels.

Global wheat production is projected to grow 12 percent through June to 683 million metric tons or 25.1 billion bushels.

A little hope has emerged as dry weather in Argentina may help keep wheat prices from falling too much.

But even with some of the drought conditions in China putting a little pressure on wheat commodity prices and wheat futures, it won't be enough to push wheat prices any higher as there was so much wheat produced and on the market this year, that even dry weather and drought conditions hasn't been enough to push commodity grain prices up, including corn futures, soybean futures, and wheat futures.

Commodity traders will have to look at some of the base metal futures and the oil contango for not only a haven for their money, but a place to make some money in the commodity and overall market in 2009.