Grain Journal - July/August 2008 - (Page 97) Wheat Merchandising DEMAND FOR MILLING QUALITY WILL CONTINUE TO DRIVE THE MARKETS The wheat market has or financing and will need to WHEAT begun to congest in the $8keep some wheat moving. MERCHANDISING to-$8.50 area vs. Kansas City. Last year during harvest, Kyle Smith Hard red winter wheat harwheat was $2 per bushel vest is nearly over, and millcheaper than it is this year. ers and exporters are assessThis higher price will strain ing the quality. Basis has brolines of credit and keep elevaken, but demand still exists tors from hedging as much. for heavy-test-weight, highSpreads. This weakness protein, milling-quality in basis will keep spreads wheat. We expect this to conwide for now. The market tinue through the winter. should continue to pay As far as regular-quality 100% of full country carry wheat, there is plenty of that at least through December. moving, and basis generally Kansas City September/ should break from now December spread is currently through September. Most elevators are 24 cents. This is 110% of full country having difficulty with space for fall and/ carry and should be locked in. Kansas City December/March is trading 211/2 cents. This is 104% of full country carry and also should be locked in. Chicago wheat spreads should be wider than full country carry because of the potential size of the crop. Spreads after the first of the year could narrow depending on what USDA does with CRP or what production is in the Southern Hemisphere. Because of the volatility of the markets, continue to recommend minimum price contracts to your producers. This allows them to lock in a floor while still having upside potential, if any occurs. Kyle Smith is regional director and commercial grain specialist with F.C. Stone LLC, Kansas City, MO; 800-255-6381. Response No. 971 Response No. 972 J/A GJ 97 http://www.asicoverbuildings.com http://www.shoresales.com http://www.asicoverbuildings.com http://www.shoresales.com
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