The contract price of wheat pumped the breaks this week, caused not so much from any type of seasonal reaction but rather an overall trend in the grain markets.
“Both wheat and corn set new contract lows,” said Kim Anderson, Oklahoma State University Cooperative Extension grain marketing specialist. “Still, the general consensus by analysts is that both commodities are at or near their bottom.”
Wheat had support at $4.30 but has since worked its way down to $4.25. Anderson had previously warned that breaking its support line at $4.30 would open up the potentiality of dropping by as much as 20 cents before it hit another support level.
“Currently, it has come off that some and is just treading water for the moment in a limited range,” he said. “I will admit that breaking the $4.30 mark has made me a bit nervous about the future.”
Anderson explains the current movement is a reflection of the overall trend in the markets. As of this writing, traders dealing with Chicago wheat contracts are near 109,000 to 110,000 short.
“This situation is mirrored in other commodity markets as well, including corn which nearly set a record at about 220,000 contracts short,” Anderson said. “Hard wheat currently is running 15,000 to 20,000 short.”
Traders have mostly been selling into this market rather than buying. Anderson explains the commodities must clear the market first for profitability to return.
“Any chance of seeing a price increase will depend on the quality of product farmers deliver at harvest,” he said. “With high test weight and protein levels, prices will go up by 75 cents to $1 or more.”
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Agronomic practices are available to boost test weight and wheat grain protein without sacrificing yield. First, make sure to select appropriate varieties for specific Oklahoma growing conditions. The six most popular hard red winter wheat varieties planted for the 2016-2017 growing season were all developed by the OSU Division of Agricultural Sciences and Natural Resources’ Wheat Improvement Team:
- Gallagher at 20.5 percent of acres planted;
- Duster at 5.7 percent of acres planted;
- Endurance at 5.7 percent of acres planted;
- Iba at 4.7 percent of acres planted;
- Ruby Lee at 4 percent of acres planted; and
- Doublestop CL Plus at 3.6 percent of acres planted;
“OSU-developed wheat varieties accounted for nearly half of the total wheat acres planted in the state last year,” said David Marburger, OSU Cooperative Extension small grains specialist. “These varieties are bred specifically for the region and possess enhanced traits relative to drought, disease and insect resistance while producing good yields, improved protein content and high-quality baking and milling characteristics.”
Other recommended best management practices include producers knowing residual soil and crop nitrogen status, selecting an appropriate pre-plant and in-season nitrogen rate, utilizing effective weed controls and using fertilization practices that minimize nitrogen losses, among others.
“Best management practices should result in maximizing wheat grain yield potential, as well as providing an acceptable level of protein content, say 11.5 percent at the very least,” Marburger said. “For nitrogen fertilizer management, these practices can help ensure producers are maximizing returns on their nitrogen fertilizer investment into the crop, ensuring less money is spent on unused nitrogen fertilizer which can be lost multiple ways.”