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Smaller U.S. wheat crop continues to drive market swings

A market analyst says he expects volatility in the wheat markets to continue.

Jim McCormick with AgMarket.Net says prices responded sharply higher following this week’s USDA’s supply and demand report that predicted the smallest crop since the 70s. “It had to recalibrate itself – plain and simple – pretty violently.”

However, prices have since moved lower even though results from this week’s hard red winter wheat tour also confirm USDA’s projections.

McCormick tells Brownfield, “We’re actually importing wheat from other countries as of last week. You’re probably going to see more of that. The price of U.S. wheat right now is trading at a premium compared to the rest of the world for the most part.”

Central Kansas farmer Adam Baldwin says it’s been extremely difficult to market his crop. “I think the odds of me filling my contracts right now are very slim. We have these grain market rallies, and I know a guy should be out there getting into them, but we don’t know if we can get a crop or get it up.”

McCormick says harvest progress and yield results will also likely contribute to the uncertainty.