What USDA Quarterly Stocks Report Revealed for Wheat
Fortenbery: "One of the things that matters when you think of future price action is the relative percentage of stocks held by farmers versus those that are already being held by commercials. Actually this year according to the stocks report about 29 percent of wheat is being held by farmers in their own facilities or facilities that they are leasing and the balance being held by commercials. That is a little bit higher percentage than a year ago."
The reason that matters, Dr. Fortenbery says is that the larger the share the farmers hold, the more aggressive the commercials to be to get the farmers to sell it.
He recalls that what was really driving the higher wheat prices from August to the first of November of last year was the corn market -- not so much wheat dynamics. It was the possibility of feeding more wheat due to the poor corn crop. That is not the case now.
However, Dr. Fortenbery put the news into perspective.
Fortenbery: "The news is positive but not positive enough to put us at the prices we saw a year ago."