Uncertainty comes from slightly below average wheat stocks; very tight U.S. corn stocks; extremely late freezes in Colorado, Kansas, Oklahoma, and Texas; delayed corn and hard spring wheat planting; expected above average soft red winter production; dry planting conditions in Australia; increased exports from India; and economic problems in Egypt and the European Union.

About the only thing for certain is that the wheat harvest prices will be different from what the market is now offering. However, the current June forward contract price is a good place to start interpreting the market and developing a strategy for selling 2013 harvested wheat.

At this writing, the KCBT July wheat contract is $7.90. The forward contact basis for some elevators in Oklahoma and the Texas Panhandle is a minus 40 cents. 2013 harvest delivered wheat may be forward contracted for $7.50.

The Oklahoma/Texas Panhandle monthly average 2012 June wheat price and the five-year average June wheat price were both $6.42.

During the last five years, average June wheat prices have ranged from $3.72 to $8.14. Using $6.42 as a benchmark makes $7.50 look relatively good for harvest delivered wheat. The market may be saying, “price some wheat.”

The freeze damage, delayed corn planting, and other current market factors have already been used to establish the current KCBT July wheat contract price of $7.90. Future price moves up or down will be based on new information.

Prices change because new information changes the mood of the market, the number of buyers and sellers, and the amounts bought and sold.

Learn to recognize the market’s moods, note what environmental events impact the moods; learn the normal outcome of each mood, and then modify the plans to match the moods.

Strive not to over-react. As with life, it is often best to keep things simple. Most importantly, have strategies that allow you to calmly react to each market mood.

In reality, price savvy is having good plans that can be adapted to each market situation (mood). 

          You might also like

Input costs top list of cotton grower concerns

LED lights reduce costs for greenhous tomato growers

Custom planting may be good option this year

Mudding in corn not a good idea, but here are tips to help minimize problems