2019 Wheat Prices over $7.00/bu
One of the most common things I hear about wheat is that “you can’t make money growing it”. With Wheat prices in a current rally situation, you should be able to eliminate that argument from your list if you take advantage of it. Wheat is like every other crop and it takes 3 very precise actions to be successful. A well-planned management strategy, an intensive scouting strategy, as well as a very proactive marketing strategy are the key elements to making wheat great on your farm. The first two usually get focused on the most, but it can be argued that the third is the most important.
A proactive marketing strategy is so important to any operation. We know the importance of keeping a diverse cropping rotation to maximize soil health, and marketing can be the key to avoiding rash pricing strategies.
Wheat prices in general have made rallies in the past 3 weeks making 2019 wheat prices very strong right now. When talking with Russell McLaughlin, grain merchandiser with Palmerston Grain, he stated that he “has booked thousands of acres of 2019 wheat in the past couple weeks”. “If you can book wheat at above $7.00/bu (257.00/MT) why wouldn’t you” he continues. “Even if that is your lowest price for the 2019 and 2020 crop years, the potential for profit with wheat will be fantastic” he concludes.
According to McLaughlin, most of our pricing rally stems from weather conditions and concerns in Western Canada and the United States. “Most years we see some sort of weather based rally in the markets, and they typically don’t last very long once buyers cover their risk – so reward the rally by participating in higher prices”. He continues, “If you want to be proactive on wheat bookings, this is the time”. The U.S. wheat concerns have added to worries about crops in parts of Canada, Australia and Russia — all major wheat exporters. This is increasing expectations of a tighter supply of wheat after record inventories had been forecast for this season.
Most elevators are also giving some level of flexibility if they handle soft and hard wheat as well. If the opportunity arises to switch to hard wheat and take advantage of pricing opportunities, most elevators will give you an option to do so.
Some growers will have a fear of booking wheat a full year in advance. This usually stems from the fact they are worried they won’t get the crop planted. I guess to that I would ask the question, how many years have you not got at least some wheat planted? Book up to your personal comfort level with long term trends.