Record world crop production in the last five years has masked the fact that demand is high as well, a market analyst says.
“I’m of the opinion we don’t need significant crop disasters to bring prices back to a better, higher level,” said Mike Krueger, founder of the marketing advisory firm the Money Farm in Fargo, N.D. “If we even took production, yields per acre worldwide back down to more normal levels, I think we’d see markets get interesting very quickly. That just hasn’t happened yet.”
Krueger will speak Wednesday during the Spokane Ag Expo and Pacific Northwest Farm Forum.
Krueger expects total wheat acres in the U.S. and Canada to decline again in 2018.
Crop issues arose in Argentina, Australia, the U.S. and Canada, but Russia produced another record crop, pressing wheat prices lower, Krueger said.
Krueger believes export demand for U.S. wheat needs to pick up, reflecting smaller crops in competing countries.
Soybean and corn planting in Brazil and Argentina could experience weather problems. If that happens during the winter, prices could increase for those crops, Krueger said.
“Even though there’s a lot of wheat on earth, there’s not a lot of good-quality hard wheats,” he said.
“Wheat’s going to continue to separate itself by class, but it’ll be a relatively slow winter unless we see exports pick up or some issues develop elsewhere.”
Krueger started with Cargill in 1974. He left in 1982 to start his company.
This year will be Krueger’s first time at the expo. He’s met many farmers in the Pacific Northwest.
“I appreciate their honesty and hard work,” he said. “I always like talking about the differences in farming practices and crop marketing ideas from different regions.”