January 7, 2008

 

Oklahoma wheat prices near historic levels on global demand
 

 

High worldwide demand is contributing to a significant boost in Oklahoma wheat prices.

 

Other factors boosting those prices, according to Oklahoma State University market economist Kim Anderson, are wheat crop problems last year and an uncertain outlook for the 2008 crop.

 

Oklahoma wheat were quoted in the range of US$8.85 to US$9.11 per bushel Thursday, but these very high prices apply to the weather-ravaged 2007 crop that was harvested in June and has already been sold.

 

Prices for the crop that will be harvested this summer are reflected in the July contract at the Kansas City Board of Trade.

 

The July contract price touched US$8.55 Thursday and closed at US$8.54 per bushel, coming within a penny of the historic high of US$8.56 set on Dec. 10.

 

By contrast, the previous record for July wheat was in April 1996 at US$6.95 per bushel.

 

"You have so much fear in this market that you don't know what is going on," Anderson said.

 

Foreign buyers have already bought more than 23 million bushels of the 2008 hard red winter wheat harvest, which is what is grown in Oklahoma.

 

"We've probably sold 10 times as much of the new crop as we normally have at this time," Anderson said. "And that's just the foreign buyers. That shows the fear and the desperation or the need the users have and the fear of not being able to get that new crop wheat."

 

Oklahoma wheat farmers produced 98 million bushels last year, up 20 percent over 2006, but still far below what would be considered a "normal" harvest in the state. Nationwide, 1.52 billion bushels of winter wheat were harvested in 2007, a 17 percent increase over a very poor crop year before.