The WHEAT Market
by Jim Kulp
Minot Milling General Manager
The quarterly stock-on-hand and prospective plantings report issued by the USDA on 3/31/11 struck a bearish tone for wheat, but a closer look reveals the 5% increase in stocks was offset by a 20% increase in usage for the 3 months prior to 3/1/11.
Also, though wheat plantings were projected to be up 8% (for harvest in 2011) versus last year, they were still under the recent five year average.
Overriding the wheat information was the decline in corn stocks of 15% which took corn futures limit up and carried wheat along with it.
Spring prices will be influenced by the poor condition of the US hard red winter wheat crop caused by dry weather since last fall. The conditions for this crop are the worst in 10 years. Cold, wet conditions might delay planting of spring wheat and durum past May in the Great Plains.
The US and Canada need good-sized, higher-quality spring wheat and durum crops this year to offset the poor quality that will be carried over from last year's crop. Delays in planting which could cause frost damage and a raging corn market which threatens to take acres away from spring wheat and durum this year should be of great concern to users.
Contact Jim at Jkulp@MinotMilling.com
