Future wheat prices may be predicted by reviewing prices during the last five years. Since June 1, 2007, KCBT wheat contract prices have been between $4.53 (near this price several times between September 2009 and June 2010) and $13.95 (March 10, 2008).

Using a central Oklahoma elevator, the basis has been between a negative $1.29 (Aug. 2, 2010) and a negative 6 cents (Nov. 9, 2011). The average basis was a minus 66 cents.

The cash price range offered by a Central Oklahoma elevator was $3.39 (June 9, 2010) and $12.62 (March 10, 2008). On June 9, 2010, the Central Oklahoma basis was a minus $1.19 and on March 10, 2008, the basis was a minus 66 cents. The average price was $6.49.

These prices imply that over the next three to four years, the KCBT nearby wheat contract price is expected to be between $4.53 and $13.95. Cash wheat prices are expected to be between $3.39 and $12.62 with an average price of $6.49.

Cash prices above $10 may have been an anomaly. During the last 1,353 market days (between June 1, 2007, and October 18, 2012), cash prices have been above $12 on 3 days, above $11 on 15 days and above $10 on 25 days.

At this writing, wheat may be forward contracted for about $8.20. Since June 1, 2007, wheat was above $8.20 for 257 days or 19 percent of the time.

On the bottom side, prices have been below $4.50 on 213 days; below $4 on 76 days; and below $3.75 on 25 days.

Over the next two years, I will be surprised if Oklahoma and Texas wheat prices go below $4.50. Prices may go above $10, but if this happens, not much wheat will be available to sell. The average price is expected to be closer to $7.

Some producers complain about wheat price variability. As I compare the current $8.50 prices to the $3.50 prices of yesteryear, I am reminded of a picture in my office of an outhouse. The caption says, “Anyone who would like to go back to the good old days, just hasn’t been there on a cold morning.”