It’s no doubt wheat has been a grain of discussion this year. As wheat harvest finishes up, it appears the crop will be larger and in better condition than analysts expected.
“The wheat crop has surprised everybody,” Bob Utterback of Utterback Marketing told Ag Day's host Clinton Griffiths. “It’s been better than expected.”
This strong supply of wheat will likely be a challenge for the corn market as the two grains compete for storage space.
“As an elevator manager in Kansas, Missouri, Indiana, or other wheat states, I can look at wheat all the way out to next year, and I might make 50 cents,” Utterback explained. “If I look at corn all the way out, wheat is paying me more money to store than corn.”
He predicts that elevators will fill up with wheat, leaving little or no room for corn. “The implication is that unless corn has some significant yield stress within the next two or three weeks, basis is going to widen," Utterback predicted.
Make a Plan Now
He said that that farmers who need to sell corn right out of the field should make arrangements now. “If you have off-the-combine cash sales that you must make, your time now is very finite,” he explained. “You have no more than 10 to 15 days."
Decisions should be made by mid-July on what you’re going to do with those off-the-combinecash sales. “If you don’t make the decision, the market will make the decision for you with such a low price that you’ll force yourself to find some other storage,” Utterback said. “The wheat market is going to compete with corn, and that’s going to be the depressant unless we have a significant dry weather event in the next two or three weeks.”