Wheat Market Snapshot

A dry, warm spring pushed spring planting two to three weeks ahead of normal in most regions for wheat. Northwest Farm Credit Services Knowledge Center’s Matthew Kloes gives an update on the wheat industry
Kloes: “Current wheat prices are near a four-year low and remain precariously close to growers break-even prices. Bearish market fundamentals including: higher than expected global wheat supplies; abundant supplies of corn and soybeans that pressure prices for all grains; and a strong dollar that limits export opportunities — mean there isn’t much that would push prices higher on a sustained basis in the near term. However, there may be some decent selling opportunities as the coming crop develops.”
The quarterly snapshot states that lower fuel prices provide limited reprieve from lower grain prices. Although not unimportant, fuel expenses are less than 10 percent of growers’ total operating expenses. Conversely, fertilizer and crop protection expenses are 40 percent or more of producers’ total expenses. Unlike fuel, fertilizer and crop protection prices are stable to slightly higher over the prior year.
Kloes continues
Kloes: “Well, primarily we are going to see the market move based on weather. Concerns over drought and freeze damage from this winter both domestically and internationally could lead to price spikes that could provide windows of profitability. Geopolitical uncertainties could also drive prices higher. For instance, wheat production and trade in the Black Sea region faces constraints from political unrest, Russian export limits and overall uncertainty.”