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Wheat stocks offsetting expectations for smaller crop

A marketing analyst says she expects winter wheat basis to tighten later this year because of limited planted acres.

Angie Setzer, co-founder of the grain marketing firm Consus, tells Brownfield large stocks will likely help offset the estimated six percent decline in plantings.

“Wheat on hand was up pretty substantially versus a year ago, about 12 million bushels more, which doesn’t sound like a lot, but it’s a whole mill worth of additional demand basically,” she says.

Setzer says wheat is not a solid investment with the current market.

“The economics in the wheat market right now don’t even really support growers putting wheat in the ground, give them a reason probably to not keep it and that might be the direction that they go,” she says.

She says China increasing demand or a significant weather event could support wheat prices, but the outlook for any major move higher remains limited.