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Where is Wheat market heading?

21K views 74 replies 31 participants last post by  Slip clutch 
#1 ·
Im just looking for some advice from guys that have been in the game longer than myself. I know its impossible to know where the markets are heading exactly but experience does count for something. Basically I am wondering what peoples feelings are for the hard red milling wheat between now and September. I still have all of last years wheat and am looking to sell it sometime between now or then. This past week the price dropped quite a bit and started to make me wonder why I hadn’t already sold some or all of it.

Is this drop in price going to continue? Is it just because its getting close to spring and prices will rebound afterwards? It looks like it has been typical for the price of wheat to spike in July/August in the past few years so is holding out for then a better idea?

Fortunately I am in a position right now that I dont need to sell it but after spring time I will have inputs to pay for.

Any advice is appreciated and thanks for taking the time to reply.
 
#3 ·
If anyone can figure it out, please let me know! We seldom grow wheat, last year was the first time in 5-6 years. Every time we grow it, the market sucks. Got more for our stuff that was snowed on 3 times, was a feed but graded a #3 with 11.8 protein than we can get now for our stuff we got off early and is a #1 11.8 protein. Can get more for the #1 stuff we have now as feed than we can get for it selling it as a #1. What a screwed up market. Not growing any next year.
 
#4 ·
I understand your thinking Kevlar. I was just looking for educated guesses from others and seeing what others might be doing in similar situations. All my wheat from last year tested between 13.3 and 14.4 and all made #1 so I wont have trouble finding a home for it. Yesterday the local price for #1 13.5 was 6.74 / bushel.

Basically just wondering what other people’s guts are telling them.
 
#6 ·
I would wait until spring seeding is done and see how many acres were put in. This royalty thing may cut into acres and cause a little panic rally early summer. My thinking was $7.50 a bushel would be my trigger, but #1 is in short supply right now, mine is all feed. if we have a super hot dry spring feed wheat may rally as well but you have to be diligent.
Also there is a lot of fallout with carbon tax cutting into production cost which may also cause some nerves to fret on securing supply.
If i had a good inventory i would put one third (or what you need to clear bills) of it at $8 bu on a trigger at your elevator. Just my opinion, take it for what it is worth, and do what you feel comfortable in your gut.
By no means have i ever scored big, Lol.
But i believe there will be no bumper wheat crop for 2019, just to many negatives in the air right now with the will by farmers to produce wheat. (just my speculation).

I wonder how high does the price per bushel have to get before it makes sense to import our needs?
 
#10 ·
I keep getting these amber (durum) alerts from AGT foods for $6.85 like I am supposed to jump out of my seat and run to the bin. I wont move until that's safely over $7. Once St Lawrence is ice free, some seeding intentions are announced and maybe some weather worries is the time to usually sell.
 
#12 ·
That's maybe a good thing. I find once elevators etc. start calling looking for something, usually in a week or two the price will take a jump up. They know prices are going up so want to fill the elevators up with the cheap stuff first. Have had a grain brokering company from Alberta calling for a couple months now looking for barley, but their prices are a joke. Told him what were getting for ours picked up and at fist he didn't believe me, but after calling a few times he now believes me. This tells me people are getting short of barley and there will be a price increase shortly. Generally the only time an elevator speaks to me is when there is an opportunity for them to make a good chunk of cash. And maybe because I am a dick and they don't want to deal with me! Sometimes I am too honest with them when I let them know what I think!
 
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#13 ·
All the wheat here was 1 red high protein and basis has been terrible all winter. Elevators tell me there is unit trains of targets in for $7 so don't expect them to ever post a good price, plus they have guys with futures locked in that have zero options on basis now.

We need more livestock production and feed markets.
 
#20 ·
It did in the states. Don't forget all those years you "Western" Canadian durum growers had to keep your durum in the bins so the market wasn't flooded while the US producers got to cash in. Not sure how any durum producer could willfully support that brutal system...they got bent over worse than the HRS growers!:rolleyes:
 
#22 ·
US winter wheat acreage isn't down enough to have much impact I don't think. The last couple years have been around 32.5 million acres. This year forecasted is 31.3 million. Conditions are worse than last year but it's still early. Total area is less than the 40-45 million from years back but everybody and anybody can grow wheat. Russian total acres are down but acres are up in higher yielding districts.

If the dollar would take a crap it would help quite a bit. The wheat sales last week were all sourced from other countries.

A deal with China would help quite a bit if wheat can piggy back in with the corn. Not sure we can count on that in the next 2 months.
 
#24 ·
It’s interesting hearing some history. So feel free to continue the discussion. I was mainly looking for advice for the short term between now and September. I know I have to sell between now and then because of bin space and it doesnt make sense to pay a pile of interest on inputs waiting for a few more pennies per bushel. I just wondered if peoples feelings were that it would continue to dive or if it would rally a bit towards july/august.
 
#25 ·
It’s interesting hearing some history. So feel free to continue the discussion. I was mainly looking for advice for the short term between now and September. I know I have to sell between now and then because of bin space and it doesnt make sense to pay a pile of interest on inputs waiting for a few more pennies per bushel. I just wondered if peoples feelings were that it would continue to dive or if it would rally a bit towards july/august.
 
#26 · (Edited)
Down here I got $20/bu for 16% in 2011 I think it was(whatever year had the record high, I had alot of high protein stuff). Horizon resources shut down about a truck or two after me. They didn't like writing million dollar checks as they couldn't get it out of Williston fast enough, they were worried about being stuck with elevators full and piles of it and the market crashing. Once it fell below $15 they opened again.

If it helps any, the word in the Valley(ND side, central anyways) is if corn and beans don't come up, it will be all wheat and barely...not sure why many are saying that, but it's their life. Maybe they're saying that to make a market go up...

Otherwise markets are you're dammed if you do, damned of you don't. Down here there's an investment guy on 550 who says(which is true) there will be a rally sometime between February and March to make us plant wheat(give us hope) then it'll go down again. Historically it is true.
 
#27 · (Edited)
It's funny how some of you feel this false sense of a free market is even real.

# 2 in Canada is really a #1 hrs in the global market. Plus the elevators blend it for their profit, plus they take more dockage then what's really there, we don't get paid for any dockage, yet they do, plus they make money on exchange rates.
Then there is the fact that they complicate the **** out of the marketing, as to make sure you either A get confused as all **** and don't market well, or B use their over priced marketing people and schemes.

I don't trust these huge multi national elevators as far as I can throw them, which isn't very far.. open your eyes people, they (along with bribed government officials) control us now, and they came to Canada for one reason, and one reason only.. to get rich, and that's what they're doing.
Just like SNC Lav, there's a lot of corruption in big business out there. Many people underestimate the power of these large companies.

So wheat.. anyone's guess what they will want to pay us, I say they don't mind us grumbling about price, but just enough to make sure we keep farming so the money keeps rolling in for them.
 
#28 ·
hihi962 the Canadian grading system has always been on it's own set of rules long before I started farming. At least they have recently got rid of the KVD(kernel visual distinguishability) which was a complete joke! Yeah marketing is complicated but well worth the effort in the scheme of things on a farm. It also requires some self control and patience, which are also good qualities to have as a farmer. I'm not sure what the evil grain companies are doing to complicate marketing beyond calculating basis differently or using a different base grade??? Also I'm not sure why anyone would want to trust the Federal gov't in Canada with pricing their product after how corrupt they are proven to be, I'll take my chances with the dozen or so grain companies who have to compete with each other.

kochia I wondered if there wouldn't be a lot of cereal grains go in south of the border. Last year wheat did better than corn here for net returns and is less risk.
 
#32 ·
My opinion is USDA hasn't dropped our planted winter wheat acres enough yet. Every guy I talk to from kansas says they were so wet last fall they only planted 1/3-1/2 the acres they usually plant, havent heard about that in any market news or reports have we? In Western Kansas and Nebraska we have figured out how to grow dryland corn in place of wheat in the last few years, lots of guys doing corn on corn instead of going back to wheat also.
 
#33 ·
USDA reports aren’t the be all end all, it’s a tool the grain trade uses but the lack of activity around this last report points to the fact the traders largely have the report figured out before it is released. When they differ it gets fun buying grain though!
 
#35 ·
Lock that down highmarker, EU and Black Sea will have feed grains for sale in May and June, and if the US and China make a deal, corn and bean meal will flood into China. That trade battle has really propped up our feed grain price but it’s not something I would count on to carry through summer
 
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