Goldman Sachs boosts wheat price forecast
SYDNEY (Reuters) - Investment bank Goldman Sachs <GS.N> has raised its outlook for Chicago wheat futures by 47 percent to $13.50 a bushel after the U.S. Department of Agriculture cut projected 2007/08 U.S. wheat ending stocks.
The Goldman Sachs three-month and six-month price forecast compares with CBOT March soft red winter wheat <WH8> futures closing price on Friday of $10.93 a bushel, after prices again rose by their 30-cent daily limit.
Record high wheat prices were sparked on Friday by new world agriculture supply and demand estimates by the USDA, which cut projected U.S. wheat stocks at the end of the 2007/08 marketing year on May 31 to 272 million bushels from its estimate of 292 million bushels in January.
This is the lowest levels of stocks since 1947/48, Goldman Sachs said in its Commodities Watch report, issued on Friday.
Acute world wheat shortages, after crop problems in both the northern and southern hemispheres and strong export demand, have sparked wheat price rises on U.S. futures exchanges by the daily 30-cent ceiling for most of the past three weeks, causing the exchanges to raise the limit from February 12.
"Given the acute shortage of U.S. spring wheat, we are raising our three and six-month CBOT wheat forecasts to 1350 cents/bushel," Goldman Sachs said.
An extreme shortage of wheat has created upward pressure on prices across the wheat complex, it said.
Friday's USDA forecast stocks cut was also based on a 20 million bushel upward revision of U.S. spring wheat exports.
Goldman Sach's new price forecast is up from its previous forecast of 920 cents a bushel for three months and from 1,000 cents for six months.
Its 12-month forecast has been left unchanged at 850 cents a bushel.
Hard red spring wheat futures on the Minneapolis Grain Exchange led wheat's price charge on Friday, with the March contract <MWH8> rising to $15.53 cents a bushel, the highest price for any wheat contract in the United States, the world's top wheat exporter.
Australia is normally the second-biggest wheat exporter, after the United States.
(Reporting by Michael Byrnes)