Below is an analysis of the wheat markets by OSU’s Dr. Kim Anderson:
During the last three trading days (May 18, 19, and 22), Oklahoma wheat prices declined 77 cents. The 77-cent price decline followed a three-day 53-cent price increase. Some market analysts attributed the price increase to the May WASDE and USDA Production reports (released May 11), which projected U.S. hard red winter (HRW) wheat to be 514 million bushels (Mb) compared to 531 Mb in 2022 and a 10-year average of 806 Mb.
Oklahoma wheat production was predicted to be 49.5 million bushels (Mb) compared to 69 Mb in 2022 and a 10-year average of 95.5 Mb.
Kansas was the big news with a 2023 wheat production estimate of 191 Mb compared to 244 Mb in 2022 and a 10-year average of 321 Mb.
All U.S. wheat production was projected to be 1.66 billion bushels (Bb) compared to 1.65 Bb in both 2021 and 2122. The 10-year average U.S. wheat production is 1.92 Bb.
Some analysts also attributed the 53-cent price increase to Russia’s reluctance to extend the Ukraine/Black Sea export agreement which would stop Ukraine’s wheat exports.
When Russia agreed to extend the Black Sea export agreement for two months, Oklahoma wheat prices broke the uptrend and declined 77-cents.
In all probability, the 77-cent price decline is the result of the Black Sea export agreement and the weather.
A producer stated that he is now going to harvest wheat rather than disaster the acres and collect crop insurance. He contends, and other producers agreed, that recent rains and mild temperatures are conducive to filling the wheat kernels and increasing production.
One other market factor should be mentioned. 2023/24 wheat marketing year world wheat production is projected to be 29 Bb. Increases in foreign wheat production are expected to offset below-average U.S. wheat production.