March 2018 Winter Wheat Prices Recap

It was a tough month of winter wheat prices as weather premiums evaporated and concerns about crop quality across the U.S. Plains began to abate. Drought conditions remain across half of the United States, but badly needed rains began to arrive throughout the month.

That fueled a lot of speculative selling across the complex. In addition, markets continued to digest the news that Russian exports remain at record levels and that the world will only experience a further rush of low-quality wheat from Black Sea ports.

Here’s a breakdown of the action on the contracts that we’re watching for Chicago soft red winter wheat this month:

  • May 2018: -8.9% or -44.0¢ to $4.510 USD / bushel
  • July 2018: -7.6% or -38.8¢ to $4.685 USD / bushel
  • Sept 2018: -6.9% or -36.0¢ to $4.853 USD / bushel
  • Dec 2018: -6.3% or -34.3¢ to $5.065 USD / bushel

And this quarter:

  • May 2018: +2.4% or 10.7¢ USD / bushel
  • July 2018: +3.4% or 15.2¢ USD / bushel
  • Sept 2018: +4.2% or 19.5¢ USD / bushel
  • Dec 2018: +5.1% or 24.5¢ USD / bushel

Here’s a breakdown of the action on the contracts that we’re watching for Kansas City hard red winter wheat this month:

  • May 2018: -10.5% or -55.0¢ to $4.673 USD / bushel
  • July 2018: -9.8% or -52.7¢ to $4.863 USD / bushel
  • Sept 2018: -8.8% or -49.0¢ to $5.053 USD / bushel
  • Dec 2018: -7.5% or -43.2¢ to $5.298 USD / bushel

And this quarter:

  • May 2018: +6.0% or 26.3¢ USD / bushel
  • July 2018: +6.1% or 28.0¢ USD / bushel
  • Sept 2018: +6.9% or 32.5¢ USD / bushel
  • Dec 2018: +7.3% or 36.0¢ USD / bushel

March got off to a bearish start with the release of the monthly WASDE report. The USDA reported an uptick in U.S. ending stocks and a decline in expected exports.

On Thursday, the USDA reported that all wheat stored declined by 10% year-over-year to 1.49 billion bushels. On-farm stocks were estimated at 259 million bushels, about a 26% decline from last year. Off-farm stocks came in at 1.24 billion bushels, a 6% decline year-over-year.

This month we looked at forecasts for winter wheat across the globe, from the giant of wheat production, Russia, to the still competitive Australia, to acreage estimates for the EU.

Specifically, we looked at:

  • Crop conditions in the EU and their expected impact on prices,
  • Ever increasing wheat production from Russia and the fallout around the globe,
  • Increasingly competitive Australian exports; and
  • Import trends in Egypt and Saudi Arabia.

Be sure to sign up for your free 3-week trial at GrainCents as this month could be the most impactful for how and when you price your winter wheat for the rest of 2017/18 old crop supply, as well as a significant portion of your 2018/19 supply.

About the Author
Garrett Baldwin

Garrett Baldwin is a content strategist and editor at FarmLead. He covers the global grain markets and public policy issues related to the agricultural industry. He is a graduate of the Medill School of Journalism at Northwestern University. He also holds a Master’s Degree in Economic Policy from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University, and an MBA in Finance from Indiana University.

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