Wheat prices down 40% from peak

The price of wheat has fallen 40% from a record peak set in February on expectations of a bumper harvest.

The slide could ease sky-high global food prices but analysts said it did not mean that the price of other grains like rice would fall.

Soft red winter wheat on the Chicago Board of Trade (CBOT) fell to its lowest level since November at $8.01 a bushel on Friday.

It hit a record peak of $13.50 a bushel in February.

Prices reached record levels as poor weather hit production and big exporters like Kazakhstan, Russia and Argentina put restrictions on wheat shipments to control domestic inflation.

Demand from Asia's fast growing economies for wheat, which is used to make bread, pasta and noodles, has also pushed up prices.

Record crop predicted

However, farmers have responded to higher prices by planting more of the crop, which is expected to lead to a bumper harvest this year and next.

The International Grains Council has projected a record world wheat crop of 645 million tonnes in 2008/9.

"The big rise in prices in 2007 and early 2008 was a strong incentive to increase the planting of wheat," said Sudakshina Unnikrishnan, an agricultural analyst at Barclays Bank.

"The market is pricing-in expectations of a bigger crop from summer onwards."

But Mr Unnikrishnan said the price of other crops like rice, sugar and corn could remain high:

"The increase in wheat planting could come at the expense of other crops - it's a zero sum game," Ms Unnikrishnan said.

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