11/21/05 Where are club wheat premiums headed?

Farm and Ranch November 21, 2005 This was the third lowest production year for club wheat in the Pacific Northwest in the past 15 years which sent the price premium for club over common soft white up to 50 cents a bushel this fall at Portland. Most recently the premium has dropped back to 45-cents and has been staying there. Is that it? Glen Squires, an economist with the Washington Wheat Commission won't offer any specific price projection. Squires: "It is pretty tough to gauge where that premium is going to go. It just has to do with supply demand and right now the supply is relatively tight. What is going into the ground now isn't going to be available until next year. So, there is every reason to believe that the premium ought to hold where it is and maybe increase a little bit." Back in 1999-2000, when club supplies were even tighter, the premium went up to a dollar a bushel or more. That prompted some overseas buyers to cut back or reduce the mix of club in their western white wheat purchases. During a Wheat Commission meeting last week when asked at what premium level purchasers will begin switching Squires answered "We are there now." He wouldn't repeat that during an interview but did offer; Squires: "Putting a little bit of a damper on that rise in premium is that there are a couple of countries that aren't buying as much this year primarily Indonesia and China and so the demand for western white isn't quite as strong." But Squires says that's true of soft white wheat overall for which exports are down 24 percent compared to this time last year. I'm Bob Hoff and that's the Northwest Farm and Ranch Report on the Northwest Ag Information Network.