07/17/06 When traders focus on wheat demand

07/17/06 When traders focus on wheat demand

Farm and Ranch July 17, 2006 Weather has been the focus of wheat futures traders the past several months. A drought's impact on the hard red winter wheat crop in the Plains, and now perhaps drought decreasing the hard red spring wheat crop of the northern Plains. But once the market gets a handle on production it starts to look at demand for the crop. Victor: "Forty-nine percent of all the wheat we are expected to produce in 2006, 49% of it is expected to leave in the form of exports. Our export program, although early in the marketing year, we are not getting too many looks for the big packages that foreign buyers are looking for." That's Joe Victor of Allendale Incorporated. He says their clients have been given a red flag warning to watch out for a price break at Minneapolis once the spring wheat harvest hits about 40 percent complete. Victor says that's what happened to Kansas City wheat this year. It was able to come back, along with Chicago, because of the concern over the spring wheat crop with Minneapolis leading the way. But once the spring wheat crop is sized up, that's it, at least as far as U.S. production Victor says they do expect U.S. exports to pick up in the fall, but he says look out for price pressure in March of 2007. Victor: "Farmers are going to respond to these prices. Not only in the United States but globally. We could see a very similar type production and weakening in prices, higher production-weakening in prices as we saw in 2003 going into 2004." Joe Victor of Allendale Incorporated. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network
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