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Agricultural News


U.S. Wheat Industries President Vince Peterson says we have Some Rollercoasters Ahead of us for the Wheat Export Market

Tue, 10 May 2022 09:58:19 CDT

U.S. Wheat Industries President Vince Peterson says we have Some Rollercoasters Ahead of us for the Wheat Export Market During the National Association of Broadcasters Washington Watch, Farm Director KC Sheperd was able to visit with the U.S. Wheat Industries President, Vince Peterson. Sheperd and Peterson talk about the wheat supply and the factors that contribute.

"We are still in the middle of a huge volatile and uncertain issue, and I think frankly until we know what the prosecution of the war is going to be, how long it's going to go, how far Russia is going to go, and what the end might look like, we are going to be in this kind of volatile market in the meantime," Peterson said.

We have a big hole in the marketplace, Peterson said. Normally, Peterson said we have about 20 million tons of wheat that would be exported from Ukraine, but less than half of that is going to make it to the marketplace this time.

"Normally, you have got 30 million tons out of Russia and probably a third of that is not going to make it to the marketplace," Peterson said. "So, there are a lot of questions, and that impact is yet to be seen."

The weather has had a large impact on this year's crop. In Oklahoma, Kansas, and Texas there are areas in great need of rain, while further east, some areas have received too much rain.

"It's not good for us this year," Peterson said. "Frankly, we kind of needed a year where we kind of got rebalanced. We had the drought last year, and we went into this year with kind of a pretty strong price position on wheat because of the droughts we had, and it hasn't fixed itself."

Texas, Oklahoma, Western Kansas, Montana and Canada are still dry, Peterson said, then when you go to the spring wheat area, you can't get in the fields because they got snow two days ago. They are not sure how they are going to get their crops in the ground, he added.

"So yeah, I'd say we have got a challenge ahead of us," Peterson said.

Peterson said in this case, the backlash against Russia is going to be unknown. Right now, Peterson said, each Russia has withdrawn from the marketplace and taxed and limited their exports, and buyers have eventually forgiven them and gone back to normal converse.

"I don't know if that's going to be the same this time around," Peterson said.

Right now, Peterson said we are seeing risk premiums, and people shying away from Russia, politically, and economically, so that could be a change of logistics of venue. All of this, Peterson said, could be longer lasting than we know.

"We've run wheat prices up five dollars a bushel, roughly from 8 dollars to 13, and came down about half of that, so now we are kind of in a holding pattern and I think how long this war goes on is going to be a telltale on that one," Peterson said.

Given a natural end to all of this, Peterson said he thinks wheat prices will start edging their way back down, but it is too early to know right now.

"India is having problems right now, and we don't know what Russia is going to be able to do this year," Peterson said. "I think we probably have got some rollercoasters still ahead of us."

Peterson said if he had wheat right now, he would try to have a good amount of it sold already.

"You know, you think you want to wait for the last dollar, the last two dollars, that is pretty enticing to do that," Peterson said. "For new crop, I think I'd be willing to hang onto that just a little bit. I think there is just too much weighting on the possible negative side of this right now, that I'd give up on it altogether."

One of the things Peterson said we have seen through this is some change and some rationing. That has a good side and a bad side to it, he added.

"You've seen some countries, and some buyers that have shied away because of high prices," Peterson said. "On the other hand, we have seen a pickup in sales in other ones."

So, we have seen some opportunities in Mexico, Peterson said, where we are seeing sales at a record pace. In some of the South American countries we have seen a record pace, Peterson added, and a couple of places in the Asian pacific we are seeing a good pace as well, but not in China.

"There are some bright stars out there, even though our total picture is kind of flat on exports right now," Peterson said.

Click the LISTEN BAR below to hear KC Sheperd's full conversation with Vince Peterson on the wheat supply and export market.

   

   

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