Russian drought, speculation send wheat soaring
Spurred by drought in Russia and market speculation, wheat prices have surged after harvest by more than $2 per bushel.
Prices for farmers were $5.85 per bushel Monday at Cooperative Grain and Supply in Hillsboro, grain coordinator Dick Tippin said.
During harvest, prices ranged from $3.60 to $3.80 per bushel.
On Aug. 10, 2009, wheat prices for farmers were $4.48 per bushel.
Drought has cut wheat production by as much as 25 percent in Russia and Europe, he said. Russia suspended all grain exports Thursday. Tippin said there also are concerns about production in Australia.
Tippin said most of the price increase was because of speculators reacting to the conditions. Phil Timken, Peabody location manager of Mid-Kansas Cooperative Association, agreed.
“I think it’s definitely more of a speculators’ run than a supply-and-demand run,” Timken said.
Most of the wheat harvest has been sold. Tippin said farmers probably have less than a third of the harvest left to sell, but that is better than completely missing the price increase.
Timken said he didn’t think prices would immediately drop to harvest-time prices, but admitted the commodities market is unpredictable.
“If I knew what wheat prices would do, I wouldn’t be working at the co-op,” Timken said. “I’d be at home making money.”
Last modified Aug. 12, 2010