SPOKANE — Soft white wheat, primarily grown in the Pacific Northwest, is the "least ugly dog in an ugly dog contest," a market expert says.
White wheat is the only market class in better shape than its previous marketing year, said Darin Newsom, an Omaha, Neb., market analyst.
"White wheat probably has the best opportunity to go higher," Newsom said.
Ending stocks for white wheat, primarily grown in the Pacific Northwest, are projected at 49 million bushels, compared to 87 million bushels last year.
Soft white wheat is stabilizing at $5.40 to $5.50 per bushel because of good demand, Newsom said.
That will come in handy as the overall wheat market sees threats to demand during a time of growing supplies, Newsom said.
"Our stockpiles, particularly in corn and soybeans ... (and) wheat to a certain degree just keep growing larger and larger and larger," Newsom said. "We've seen six years in a row of record production in both U.S. corn and soybeans."
Corn and soybean supplies weigh on the wheat market, he said.
The U.S. market was saved in 2018 by a drought in Argentina and this year by weather conditions impacting Brazil's soybean crop, Newsom said. The countries have been buying from the U.S.
"If soybeans had collapsed, corn would have gone with it," he said. "If soybeans and corn collapse, what do you think the fate is of wheat? It's not good, it would have looked pretty ugly."
U.S. wheat exports are slowly gaining momentum, but industry projections are well below USDA's projected exports of 1 billion bushels.
Newsom advises farmers wait to sell their new crop white wheat.
"I don't see any hurry," he said. "The red wheat futures are in a world of hurt. There's enough cash issues right now to continue to support the white wheat. I'm not really afraid of growth of acres."
As for selling the crop, Newsom said he would sit on the sidelines until he sees change, deeper into the spring, selling as price rallies start to meet and exceed previous highs.
The timing is "probably a little later than I usually like to wait, particularly in the wheat market," he said.
Price increases could come at any time, particularly if demand remains strong and the global market hears "horror stories" about Australia's competing wheat crop facing bad growing weather.
Newsome would like to see prices go 20 to 25 cents higher. Above the $5.50 per bushel to $5.60 per bushel range, selling could begin to slow the gains, he said.
Newsom spoke to farmers Feb. 19 in Spokane as part of the Washington Association of Wheat Growers ' Agricultural Marketing and Management Organization (AMMO) farm management training program.