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Wheat farmers eye prices as harvest continues

Soft white wheat prices remain near the $6 per bushel mark. Farmers like Jim Kent, raising wheat near Prescott, Wash., hope to see them go higher. But world production problems don’t necessarily mean more U.S. sales, grain merchandiser Dan Steiner says.
Matthew Weaver

Capital Press

Published on July 26, 2018 9:00AM

Last changed on July 26, 2018 1:19PM

Prescott, Wash., area wheat farmer Jim Kent stands in a field of soft white wheat at the top of a hill July 25. Kent would like to see prices break out of their stagnant range and trend higher, near $6.50 per bushel.

Matthew Weaver/Capital Press

Prescott, Wash., area wheat farmer Jim Kent stands in a field of soft white wheat at the top of a hill July 25. Kent would like to see prices break out of their stagnant range and trend higher, near $6.50 per bushel.

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PRESCOTT, Wash. — Soft white wheat prices are stagnant around the $6 per bushel range, farmer Jim Kent said.

Six dollars per bushel “sounds good, but you take everything out of it and your expenses haven’t gone down,” Kent said. “Everything’s still fairly high.”

A Washington Association of Wheat Growers board member, Kent estimated he’s halfway through his wheat harvest. on 4,500 acres south of Prescott, Wash.

Test weights are up and yields are easily about 10 bushels per acre above Kent’s average, typically about 80 bushels per acre.

Soft white wheat ranges on the Portland market from $5.80 per bushel to $5.90 per bushel. Hard red winter wheat ranges from $6.21 per bushel to $7.01 per bushel, depending on protein. Dark northern spring ranges from $6.42 per bushel to $7.30 per bushel.

Farm marketings are behind normal, which implies a lot of selling in the future, said Dan Steiner, grain merchandiser for Morrow County Grain Growers.

But President Donald Trump’s announcement of $12 billion in farmer aid throws marketing “out the window,” he said. Normally, Steiner would expect catch-up sales at harvest time when marketing is behind normal, causing temporary dips in price as the market softens.

Typically, about 40 percent of the Pacific Northwest wheat crop is sold by the end of September, depending on the crop size and price.

Trump’s announcement appears to be helping the market, Steiner said.

“We don’t even know the details of it yet,” he said of Trump’s farmer aid. “In that process of aiding the farmers, it will probably keep grain off the market ... However that works out per farmer, that may heal them up and give them enough money that they can be patient and wait for the cash market to develop more.”

World production is getting smaller, with estimates from the European Union reduced to 130 million metric tons, down 8.5 percent from 142 million metric tons last year. Central and Northern Russia had too much rain, affecting quality, Steiner said, Other problems include dry conditions in Australia and lower dark northern spring wheat yields in the U.S. so far on the Wheat Quality Council tour, he said.

Steiner said prices appear stronger overall, and advised U.S. farmers to take advantage when possible.

“The reality is, as wheat prices go up, we are not seeing any increased sales,” he said. “We are not seeing stronger demand. That may happen, and if it does happen, it will most likely be mid- to late winter or early spring. It’s not going to happen right away.”

Russia and the Black Sea region will still get the majority of demand, Steiner said. Until they have generated the cash they need, the U.S. won’t earn any additional export sales, he said.

If U.S. wheat sales don’t improve by next February to April, Steiner said, that could mean a lot of pressure on the cash market.

Farmers can take advantage of rallies and sell at prices they think they can live with, Steiner said.

“Soon as we can get through harvest and bin doors get shut, I’m certainly thinking we’re going to see higher prices throughout the course of the winter.”

Kent, the Prescott area farmer, would like to see soft white wheat prices closer to $6.50 per bushel.

“I see that happening, I just don’t know if it’s going to happen in August or if we’re going to have to wait until after the first of the year,” he said.


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