New Crop Target

[malleefarmer]

dec wheat futures USA 750/760 cents per bushel

If anyone wanted to know my plan

Only reason my thoughts will change if its gets
there in hurry.

USA will produce wheat as will Canada , Russia
Black Sea Australia Europe don't forget the big
picture boys

[malleefarmer]

Oh and throw in India and Argie etc

India has a massive crop according to wires here
so have a plan

[furrowtickler]

Our plan will be to just try and get a crop seeded before June. At this time , not locking in one more bushel or even looking at targets till winter ends. Our seeding window is slowly getting later and shorter.

[SASKFARMER3]

Have my basis in place on 40000 bushels of #2 hrs.
After Thursday nights frost all the way to Texas their will be enough damage to take the Americans out of the wheat.
Were in mid April the crop is far enough advance now. Canada will seed late. Yes their are good crops out their but once the USDA says theirs is the shits look out!

[hobbyfrmr]

On the organic side of things, I locked in $10.00/bushel FOB Farm for 40% of my estimated feed wheat production with an act of God.
I have been watching the markets yo-yo with the weather and projected corn acres in the US. I bought some popcorn and plan to watch the show throughout the growing season.
The market is trying to keep a lid on things as much as possible.
You have to remember, only grain farmers like high grain prices.

[charliep]

An interesting comment that only farmers like high prices.

If high prices are the result of a crop failure and your one of the ones impacted by lower yields. Income should be a managers target which is price times yield minus cost. To take one step further, if expectations all get built into asset values (land price and rent), I not sure how much better off a farmer as a business (different story as an investor in land).

Another is the impact of high prices on volatility. If you don't like wild daily price swings, then you might have concerns about high prices.

The other issue that will be faced is demand destruction as customers have either learned to do without, reduced needs, switched to other crops or suppliers. An interesting case in point is the drought/impact on US corn exports. World corn trade is still forecast to be a healthy 96 MMT. The difference is US share of trade has dipped below 25 % when their normal share is over 50 %. The next 3 major corn exporters (Argentina, Brazil and Ukraine) have replaced US corn as has feed wheat from many areas of the world. High prices change trade patterns and encourage production in many parts of the world. To highlight a favorite quote, bull markets have long tails.

[hobbyfrmr]

Charlie you have touched on true points.
Fortunately we grew a.crop last year and the us
came up a little short. The organic.feed wheat/
barley from.canada filled the gap until January
and us buyers definitely imported from different
countries to keep the end users feeding.
Livestock does not stop eating. This allows the
end users to continue to provide consistent
supply to customers. I saw high prices in 2007
and demand destruction in 2008 where there
was no.bid for organic feed barley for a year.
That gave me some awful discomfort but
worked through it.
I think the market reacted sooner planning
imports to maintain stability. I remembered the
"no bid" movie, so when selling old crop feed
wheat and feed barley for high prices I also
signed upsome new crop production at a 35%
discount to old crop. There is still profit at these
levels, just not that real sweet "holy cow i am so
clever" kind of profit.
I think things more like , every now and then the
sun shines on a dogs a#s.

[charliep]

Perhaps my only caution is too get everyone to manage expections and consider the different scenarios.

US corn in my mind is the real wild card. Some analysts (not all) have been using 160 plus bu/acre yield based on trend yield. We have been in this range in 2 of the past few years. Obtain these yields and futures prices are likely to be $5/bu. With the exception of this past years drought, corn yields have been in the mid 150 bu/ac range. That likely holds corn in the current new crop price range. Corn yields of under 150 bu/acre and prices will hold in the current old crop range. Pick your scenario and go with the pricing realizing we don't grow corn but will have an impact on wheat.

To malleefarmers question, wheat prices have carry built in them but there is little exciting else that can be said about wheat on its own. Looking a monthly chart, wheat has held a trading range for the most part. Current prices are at the bottom end of this range. I suspect this support level will hold but your fear should be it doesn't. World wheat pricing fundamentals have moved away from North America with what is happening in the Ukraine, Russia, Kazakstan and Europe more important factors. Yes, India and China need to be included.