Wheat prices correct lower

Wheat prices corrected lower to $8.55 on the CBOT but still close to their record high of $9 a bushel, fanning fears that the cost of bread will increase.

Prices have been driven higher because droughts in key crop regions including Australia have led to smaller harvests.

Demand, meanwhile, has grown, fuelled by new markets such as China and India. One bushel can make about 73 loaves of bread, according to the BBC web site. The world probably will harvest 606.24 million metric tons of wheat by May 31, down 0.7 percent from last month’s forecast, the U.S. Department of Agriculture said. Australia’s crop will be 21 million tons, down from an August forecast of 23 million tons, the USDA said. Some analysts had forecast Australia would produce as little as 15 million tons.

Wheat also may be falling on expectations that record prices will encourage the world’s farmers to plant more of the grain, increasing supply. Wheat can be grown in nearly every region of the world, and after this year’s rally, planting is sure to increase, an analyst told Bloomberg.