What Wheat Growers Need to Watch

Earlier this week at the Spokane Ag Expo and Pacific Northwest Farm Forum, Farm Direction's CEO Kevin Van Trump shared his Ag Economic Forecast. He is one of my favorite Ag analysts out there with a lot of global insight and a common sense approach to things.

I asked him to share what things our region's wheat growers needed to be watching in the year to come. He shares.

Van Trump: "The main thing we keep telling people is paying attention to this basis level. I know the basis is strong and it is good right now but we are worried that the scenario has changed a little bit. There is going to be a little bit more glut or supply of corn in the Mid-West. You are going to see not as much storage from some of the elevators and some of the commercials. We're afraid the basis — closer to harvest — could maybe shift gears and just the landscape has changed enough to make it a little bit more difficult come harvest time."

He shared what both the bears and bulls of the trade were watching in regards to the wheat market and where it is headed. The bears look to the strong global competition and the 28 percent increase in world wheat production; feed demand for wheat is falling and the fact that wheat is shackled to corn prices.

The bulls on the other hand Van Trump shared are looking at of those facts in an entirely different way in that because world production has increased so much — there are more production areas that may have weather concerns — like China with its over winter wheat harvest and Australia with its drought.