Wheat Spike
Idaho see's a one-day, 32-cent spike in Wheat prices
Heavy rain in Europe and a drought in the Black Sea region spiked wheat prices in local and national markets on Wednesday.
In Burley, elevators reported a one-day, 32-cent surge in wheat prices. John Evans of Evans Grain in Burley says the International wheat market and the national markets affect local wheat.
"It's the Paris-Matif market, its been going up like a rocket because the European market is getting smaller. Its been dry and hot this harvest there and now they're getting rain and it is the coup-de-grace in that market," said Evans.
Evans said they topped out at 200 Euros on Wednesday morning per ton and the US market was caught short.
"Especially the Minneapolis market, they have low volume and I guess it was time to buy, so it was a crazy day. The cash markets are not keeping up with the futures, their basis has dropped a bit the past two weeks. So prices are good right now," added Evans.
December Paris wheat futures are trading near record levels for the contract. Also helping the futures market is the fact that dry weather in Europe means Russian production will fall for the first time in six years. Reports show that output in Ukraine will be lower than expected. That's the same story in France, Germany and the Baltic where wheat harvests are also expected to down drastically from last year.
Grain storage last year in Idaho was very tight and producers had to pay premium prices. Evans says storage should be better this year.
"It seems a bit looser than last year, I had a couple of growers offer me storage space, that tells me its loosened up a bit. But there's still a lot of malt barley out there but it doesn't feel as tight as last year," said Evans.
The wheat harvest across the Snake River plain is going great guns with near-perfect weather conditions. Elevators are taking in grain and that could affect local prices over the next month.
"So much of the market right now is political with the President Trump's tariffs that trickle down to us in Burley, Blackfoot, and Meridian," said Evans.
"If we knock off some of these concerns, we see it in higher prices. Trump stuck that deal with the European Union and we're close to striking a deal with Mexico and NAFTA, and we'll work out a deal with China and it'll help our local prices because its all priced into the market right now, but it's improving," said Evans.
Evans said the US wheat market is local.
"Even if its just psychological, these buyers impact what we do, even if their share is small, it impacts our market, our producers keep a close eye on whats happening, Its good to have a good day for a change."
