By Gary Wulf

  Of DOW JONES NEWSWIRES


  SUPERIOR, Neb. (Dow Jones)-Farmgate prices paid for U.S. hard wheat had
tumbled to their lowest levels in about 2 to 3 years Tuesday, with cash
corn/soybean bids also languishing at 3-week lows throughout the U.S. interior.

  With domestic elevator bids now averaging just over $4.25 per bushel, U.S.
farmers are now receiving less for hard red winter wheat than at any time since
September 2006. Hard red spring wheat prices have also slipped below $5 a
bushel for the first time since late May 2007.

  "Wheat will remain under pressure, due to bearish fundamentals and poorer
economic sentiment," predicted Benson Quinn Commodities analyst Kevin Kjorsvik,
who warns that price rallies in the wheat market "should be limited and
unsustainable until export sales improve, demonstrating that prices have fallen
far enough to stimulate demand from foreign buyers."

  National-average cash SRW wheat prices also reside at 8-month lows, with
corn/soybean bids challenging late-July lows, as well.

  "Corn and soybeans have seen swift retreats from the levels seen two weeks
ago, when December corn [futures] hit 3.75...and the November beans were at
10.66 just last Thursday," noted a Iowa grain buyer. "Soybean basis has also
collapsed, making the losses in the cash markets closer to a $1.50."

  Daily readings of average interior soybean basis had plunged another 8 1/4
cents entering Tuesday's trading session - with declines of 1/4-1/2 cent also
seen in winter wheat - although cash-premiums had strengthened by an average of
1 cent for HRS wheat and 2 1/2 cents for grain sorghum.

  U.S. grain futures were largely lower overnight, impacted by cash-contract
declines of over 10 cents for soybeans and 1-3 cents for corn/wheat.

  "Favorable crop weather and good crop condition ratings are expected to weigh
lightly on the market this morning," said Doane Agricultural Services. "Losses
will be limited a rebound overnight in outside markets. Dow Jones futures and
crude oil were higher, while the dollar index was lower."

  National cash price indices maintained by the Minneapolis Grain Exchange
reside at $10.05 1/2 for soybeans, reflecting an average basis premium of 51
cents over Monday's settlement of Nov CBOT futures. Domestic cash prices also
average $2.93 1/4 for corn (-21 cents basis Sep CBOT), $4.25 3/4 for hard red
winter wheat (-74 1/2 cents basis Sep KCBT wheat), $3.55 3/4 for soft red
winter wheat (-$1.16 basis Sep CBOT wheat) and $4.96 1/4 for hard red spring
wheat (-44 1/2 cents basis Sep MGE wheat).


  Crop Weather


  "Crop progress and crop condition numbers released Monday afternoon confirmed
what the markets already knew: we have some nice-looking corn and soybean crops
this year, but it is going to be a race to get them all to maturity before we
see our first fall frost," said Freese-Notis Weather.

  The amount of U.S. corn/soybeans rated in good/excellent condition was
unchanged this week, but ran counter to trade expectations for a seasonal
decline.

  The national crop scores - of 68% good/excellent for corn and 66% for
soybeans - are the highest ratings given to those commodities in the middle of
August since 2004.

  "With regards to maturing, it is the corn crop that is clearly the slower of
the two. I would call this the third-slowest maturing crop since 1990," said a
Freese-Notis forecaster. "At least 10% of the crop had not even reached the
silking stage this week in the Dakotas and Wisconsin; it is hard to believe
that all of that acreage will make it to maturity before frost hits this fall."