Wheat markets tend to err on the side of boring, as its one crop that is grown in essentially every region of the world. That said, ignoring what’s ahead for the market could leave real dollars on the table if growers aren’t paying attention to market moves.
Neil Townsend, of FarmLink Marketing Solutions and GrainFox, says wheat could potentially have some real upside movement in the marketing year ahead. Detractors have said wheat didn’t sustain any premium following Russia’s invasion of Ukraine a year ago, but Townsend sees it differently, and says wheat could be headed for a deferred war premium.
“If you look at what the Russians are doing right now, they’re exporting like crazy… the Russians are definitely exporting with an aggression that we’ve seen very infrequently in the past, that’s going to challenge their own stocks, and they’re not going to grow as big of a crop,” Townsend says.
That crimp in in-coming supply isn’t unique to the Black Sea region. For the hard red wheat market, despite a little bit more snow accumulating in some regions, this spring wheat crop is far from made and the U.S. fall crop did not go into the winter in great shape. The U.S. wheat stocks have been tightening over the last several years even before drought conditions hit.
“I wouldn’t sleep on wheat and I wouldn’t sleep on wheat relative to [corn and soybeans],” Townsend says.
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