Just as SRW wheat prices hit a new all-time high, the March contract was spooked, as profit taking caused the front-month contract to drop more than 80 cents in minutes. Despite the volatile end to the week, the fundamental story is still showing a shortage of wheat.
“We had a really bull fundamental before this coming in with just the drought in Canada, the drought here in North Dakota. And demand was good,” Tommy Grisafi of Advance Trading told Chip Flory who hosted U.S. Farm Report marketing roundtables this weekend. " We had so many bullish things happen. You throw a war in there. And you think about what’s happened in the world. On AgriTalk, Chip, I’ve listened to people throw out some high prices and I kind of laughed. I’m not laughing anymore.”
“We were bullish going into this spring thinking there was going to be a bullish acreage battle, right, because we just we have tight, really high demand, we have tight stocks and great set-up. And then now we’ve got this uncertainty in Russian-Ukraine with their old crop, and they’re soon to be planted new crop that we can’t buy those bushels right now. So, those production bushels are just on hold, and we don’t know when they’re going to be freed up again,” added DuWayne Bosse of Bolt Marketing.
How High Can Wheat Prices Go?
Wheat prices blew past the 14 year-high hit mid-week, with consecutive limit up trading moves. The uncertainty fueling the market is leaving many wondering how high will prices go, but AgMarket.net says that may be the wrong approach to take.
“When it comes to the Russia Ukraine story, one of the biggest concerns from producers is one, how high is this thing can go? And what I’m trying to convince them is, we need to be looking at ways to manage it put floors in, at some point, this thing’s gonna break. I don’t know if anyone’s smart enough to know when that is. And I don’t want to throw out any guesses,” explained Tyler Schau of AgMarket.net.
Watch the complete discussion from CHS Ag Industry Day in Grand Forks, North Dakota, which was hosted by AgriTalk’s Chip Flory.
