Wheat stocks shrink in PNW
By MATTHEW WEAVER
Pacific Northwest wheat stocks were about 124 million bushels as of March 1 this year, down about 21 percent from the previous year, according to the USDA National Agricultural Statistics Service.
Nationally, total stocks were at 1.23 billion bushels on March 1, about 2.8 percent higher than a year ago.
"We're running a little bit different from the rest of the country in terms of stocks," said Randy Fortenbery, who holds the Tom Mick Endowed Chair in grain economics at Washington State University.
There's been increased feed demand nationally for wheat, particularly in the Northwest, Fortenbery said.
Fortenbery expects wheat futures prices to remain under pressure. U.S. corn stocks were higher than expected, which meant corn prices dropped, and wheat prices followed.
"It's really not whether they were higher or lower relative to a year ago," Fortenbery said. "It's what people were expecting them to be."
For wheat growers, Fortenbery said the next move depends on what's already been done. If there's a good, early corn planting season, corn prices could go lower, and wheat prices would follow suit.
"It would be hard for wheat to rally all by itself," Fortenbery said.
Around the region, some wheat is selling at a cash price above $8 per bushel, Fortenbery said.
"If you haven't done anything at all, I might be selling some," he said. "If I've already been pretty aggressive and I have (crop revenue coverage) insurance, this might be a time when we're a little more patient."
Fortenbery said the weather for the next six weeks will be the market driver.
"While it's still very dry in wheat areas, things have improved significantly in the other row crop areas," Fortenbery said.
Wheat prices could be in the $6-$7 per bushel range or lower on the Portland market if the corn crop is large and the wheat crop in the Plains fares well in the drought, said Byron Behne, grain merchandiser for AgVentures Northwest in Odessa, Wash.
"I think our days of $8 (per bushel) wheat are behind us for a while, unless the drought remains in the Plains and they have a really poor wheat crop," Behne said.
Local new crop prices for wheat will likely remain in the $6.50-$6.60 per bushel range or go lower, Behne said. He didn't expect recent price bumps to last unless crop conditions get worse.
"When it was $7, they were wishing it was back up to $8," Behne said. "Better to sell $6.50 wheat than it is to sell $6 or $5.50 wheat."