As you know, the USDA is predicting record acres of corn and soybeans being planted. A good amount (4 million plus acres) are in N.Dakota and Minnesota. If it stays wet for awhile, the growers may switch to soybeans, which can be planted later. Even with the record acres of corn and soybeans thought to be planted this year, carryout numbers for wheat world-wide after this next crop year are predicted lower than this year. But of course if corn soars it puts downward pressure on wheat pricing. How about the Russians? I have attached a graph of Russian wheat production since 1994.
After the their huge crop of 2008, the world thought they would be the rulers of wheat production. We cannot forget their influence as an exporter. Currently the Black Sea Grain Conference is being held. Two topics of particular interest are transportation and domestic supply. The transportation system supplying the Black Sea ports is woefully underdeveloped with poor roads and shortages of rail cars. During the large exporting year of 2011, Russia and to some extent Ukraine pricing was competitive as long as supplies were close to the Black Sea ports. After that it simply became a exercise in futility to get the grain moved. And the next topic discussed was that Russia will be so short of grain at harvest domestically, the home larders will need to be filled first before exports bang on the rest of the world. And remember their crop is suspect because of drought weather at planting. As the adage says for all of this…..”we shall see…….”
Mike Wilhoit, Key Account Representative
Wilco-Winfield LLC
200 Industrial Way-P.O. Box 258 | Mt. Angel, OR 97362
Phone 503-569-0186 |Fax 503-845-9580
