Below is an analysis of the wheat markets from Oklahoma State University Extension grain market economist, Dr. Kim Anderson:
The market has knocked another 35 to 40 cents off the price of wheat. The price of wheat is $6.56 in Pond Creek, $6.11 in Altus and $6.21 in Perryton, Texas. Wheat may be forward contracted for 2024 harvest delivery for $6.52 in Pond Creek, $6.27 in Altus and $6.67 in Perryton, Texas.
Egypt bought 4.4 million bushels of wheat from Romania (rather than Russia) for $7.10 (FOB-Free on-board vessel). The per bushel price delivered to Egypt (C&F-Cost and Freight) was $7.50. This implies that it costs about 40 cents per bushel to ship wheat from Romania (Black Sea port) to Egypt.
The cost of ocean freight from the Texas Gulf to Egypt is roughly double the ocean freight cost from the Black Sea to Egypt. This implies that for U.S. wheat to be competitive with Romanian wheat, the Texas gulf price loaded on a vessel would be $6.20 ($7.10 – $0.80).
Russia is reported to have nearly 1.8 billion bushels of wheat to export. That’s 24 percent of total world wheat exports. Russia’s 5-year average wheat exports are 1.4 billion bushels.
The point is that Oklahoma wheat prices could continue the downtrend. The bottom could be below $6. I don’t think it’s very likely that nearby wheat prices will decline to $6, but it is possible.
