Home > News > Wheat Prices-Don’t Ask Me, I Don’t Know

Two weeks ago, I stuck my neck out and predicted $4.50 wheat by December and $5.00 wheat by June, 2018. At this writing, wheat prices are $5.00 in the Texas Panhandle and $4.66 (southern) to $4.86 in Oklahoma (northern).

The question being asked is, “Will wheat prices continue to go up?” The answer is “no one knows, especially me.” Anyone who claims they can predict prices accurately is probably lying through their teeth.


What I do know is that on April 24, Oklahoma and Texas forward contract wheat harvest prices were between $3.20 and $3.45. Prices at this writing are between $4.70 and $5.02, which is about a $1.50 price increase.

We know that Oklahoma and Texas wheat production may have been slightly below expectations, that test weights are mostly above 60 pounds, and that protein is well below average. In the U.S., hard red winter wheat production is projected to be 31 percent less than last year and 16 percent below the five-year average.

We know that hard spring wheat production is projected to be 21 percent (probably lower) than last year. The protein premium is a minus 16 cents for 11 percent and a plus $1.50 for 12 percent.

We know that, on average, in countries that produce hard wheat (Argentina, Australia, Canada, Kazakhstan, Russia, and the Ukraine), production is projected to be 13 percent less than last year. Average production in these countries is projected to be slightly above the five and 10-year averages.

Milling quality bread wheat was in short supply before the 2017/18 wheat harvest, and indications are that the supply shortage will not be alleviated.

We know that total U.S. wheat production is projected to be 21 percent less than last year and 15 percent below average.

By contrast, foreign wheat production is projected to be about the same as last year and about 4 percent above average. While major wheat exporters’ wheat production is projected to be less than last year, small wheat exporters’ and importers’ wheat production is projected to be greater than last year.

We know that managed funds wheat contract positions have changed from about 130,000 contracts short (sold) to about even long (bought) and short positions. This result may reflect a change in market philosophy from pessimistic to, at the worst, a neutral position.

The above information (much of which was unknown several weeks ago) supports current (higher) prices. For prices to continue the uptrend, foreign wheat production expectations must decline.


Given that the entire 2017/18 world wheat crop is planted (about 40 percent of it has been harvested), weather will determine production, and production will determine price. We know that weather is nearly impossible to predict.

So have we seen the wheat price high for the 2017/18 wheat marketing year? I think we will see higher wheat prices but, in reality, I do not know.

I do know that a marketing plan with price objectives (targets) will take the guess work out of the marketing decision. Set several price targets (with bushels to be sold) and sell the designated amount of wheat when the prices reach the targets. Also set dates for when to have wheat sold. If a date arrives before the target price, sell some wheat.

I may not know what wheat prices will do, but I do know how to sell wheat. Sell it with discipline and with a mechanical strategy.

Source: Kim Anderson, Southwest Farm Press


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