Still upside potential for wheat prices?

Farm and Ranch February 7, 2011 Wheat prices are at their highest level since the big price spike in 2008. U.S. wheat stocks are not nearly as tight as they were back then, so is there still upside potential for prices? Mike Krueger of M-K Commodities in Oregon says yes.

Krueger: “Yeah there is. We have just started to see countries realize maybe we should have three months in country. The world is becoming scared if there is enough, trying to settle down their populations in many cases. You know when you have strong fundamentals and outside looking for a place on top of it and fear, earnest buyers, you have a pretty bullish market. So we will see how it evolves. How the spring weather goes and etc. It is going to be difficult to answer those questions for a couple of months because of the time of year it is. Boy, we are on a razor‘s edge as to how wild get its from here to harvest.”

So Krueger’s advice is hold.

Krueger: “I have advocated holding it all. Still have 2010. Just taking some protection with puts. My main concern right now would be an outside event, world economy doing a tank number and we would go with it.”

Krueger believes the grain trade has handled the Columbia-Snake river navigation closure well, adding just hope it reopens reasonably on time.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net.

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