Marketing Wheat in This Environment
How should growers respond to a brutal two weeks in the markets? That’s the question we asked Kevin Duling a Commodity Marketing Advisor with KD Investors in Oregon.
Duling… “If I'm a grower today, I don't want to sell any more than I have to here. I mean, everybody's in panic mode and anytime you have a panic mode thing, things are going to go on sale and it's just not time to (sell) If you have to sell, sell. We can buy stuff back. But as a whole, this is not where you want to be doing most of your marketing.”
Duling says some growers locked in hedge to arrive contracts for new crop wheat ahead of the drop in futures, but probably not as many as would have liked. For basis, though, he’s still bullish.
Duling… “At least for white wheat, with the Australians kind of out of service from their drought. We think we'll have a pretty good cash basis compared to the futures. Plus you've got quite a bit of dryness in the Pacific Northwest in spots. People don't typically like to sell much when there's production questions.”
Even in this current environment, Duling sees reason to be optimistic if growers can be patient.
Duling… “I mean, we still have China in the wheat with the phase one deal. I haven't read any official notices saying they would postpone the purchases or anything out of that. But they could step in here and change the whole dynamics of the market overnight.”
Hopefully this week we can start to see some signs of the market stabilizing for wheat and other ag commodities.