In a recent discussion with Farm Director KC Sheperd, Oklahoma State University Crop Marketing Specialist Dr. Todd Hubbs highlighted how geopolitical tensions and fluctuating energy prices are contributing to significant market volatility. While recent rallies in the wheat and soybean markets have pushed cash prices higher, Dr. Hubbs warned that rising input costs and global competition continue to squeeze producer margins.
WASDE Report and Global Market Shifts
The March World Agricultural Supply and Demand Estimates (WASDE) report brought few surprises to the domestic market, but it did reflect some adjustments in international production. Dr. Hubbs noted that for this time of year, “March tends to be not much activity” and that “everybody expected those types of changes, honestly”.
- International Changes: The report showed a slightly smaller crop in Argentina and lowered wheat export projections for Ukraine and Russia.
- Soybean Adjustments: A slight increase in the domestic soybean crush was noted, balanced by lower projections for biofuel use of soybean oil.
The Wheat Rally: Driven by Uncertainty
Dr. Hubbs emphasized that the recent rally in wheat prices is not driven by changes in fundamental supply and demand, but rather by external factors like oil prices and geopolitical uncertainty. Regarding the legitimacy of the price movement, he stated, “There’s no fake rallies. It’s a rally”.
- Oil Correlation: Dr. Hubbs observed that wheat is currently “tied to oil, following around like a lost puppy basically; as oil goes up, wheat goes with it”.
- Geopolitical Influence: Uncertainty surrounding shipping and global politics is a primary driver of higher prices. Dr. Hubbs added that “the uncertainty inside shipping and in the general geopolitical space is driving the price higher”.
- Oklahoma Cash Prices: During the recent rally, cash prices for July wheat in parts of Oklahoma reached the $5.80 to $5.85 range.
During the rally period in the first week of March 2026, cash bids for Hard Red Winter (HRW) wheat (Kansas City July 2026 contract) were reported in the following ranges:
- Regional Range: Many locations across Oklahoma posted bids for June–July delivery between $5.43 and $6.23 per bushel.
- Specific Locations:
- Enid/Omega: Bids for July 2026 delivery were reported at $5.87, which fell exactly within the upper end of the rally targets mentioned in your query.
- Pond Creek and Weatherford: These locations saw basis strengthening during the rally, pushing cash prices toward these higher levels.
- Webbers Falls/Wagoner: These locations reported July cash prices near $6.03 for HRW wheat.
Soybeans and Biofuel Policy
The soybean market has also shown strength, influenced by energy prices and upcoming policy shifts. Dr. Hubbs mentioned that “everybody’s getting an idea of how strong the biofuel policy’s going to be next year” and that strength in soybean oil “might help carry the rest of the ag stack around with it a bit too”.
Production Challenges: Drought and Input Costs
While grain prices have risen, production costs have also risen sharply, particularly for fertilizer and energy. Dr. Hubbs described the current disruption in fertilizer markets as “outrageous”.
- Drought Conditions: Dry weather persists in Western Kansas, Oklahoma, and parts of Texas. Dr. Hubbs noted that weather premiums typically become more pronounced in April and May as “those crop conditions reports and weather reports really start popping”.
- Global Competition: Brazil remains a formidable competitor, particularly in the soybean market. Dr. Hubbs noted that Brazilian farms have “enacted economies of scale on their farms and it is, I mean, it’s just tough to compete”. He further elaborated on their advantage, saying, “They have huge operations, they’re spreading their costs over… just a lot of acres”.
Advice for Producers
Dr. Hubbs encouraged producers to focus on their individual financial needs when making marketing decisions rather than trying to time the market perfectly.
“Start thinking about what kind of target price you can live with on the new crop… what do you need to make money? I know everybody wants the highest price possible, but timing the market is very difficult”.
Regarding the potential for a market correction if geopolitical tensions ease, Dr. Hubbs cautioned that while some pull-back is possible, he does not expect prices to collapse. “I don’t expect it to go back down below the levels we saw… prior to this, like that $5.70 range on the July contract,” he stated. He also noted that for those who haven’t locked in inputs, “it’s probably going to be a long slow curve down for you”.
