Two Needs for Higher Wheat Prices

by Kim Anderson, Oklahoma State University Professor and Extension Economist

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The market tried to take out the $5.10 price resistance level with the KCBT March wheat contract and failed. The downtrend is broken and a sideways pattern between $4.80 and $5.10 has been established. Technically, the good news is that Tuesday's 18-cent rally set a new short-term top and the volume (number of contracts traded) was high. Lower prices on Wednesday and Thursday were with relatively low volume.

At the USDA Annual Outlook Conference, the USDA released estimates for 2010/11 wheat, corn and soybean planted acres, production and ending stocks. These estimates are not based on surveys and are not "official." Official estimates will be released March 31. 2010 wheat production is estimated to be 1.945 billion bushels (bb). Ending stocks are estimated to be 940 million bushels (mb) compared to 981 mb for the 2009/10 marketing year. The average annual 2010/11 price is estimated to be $4.90 compared to $4.85 for the 2009/10 marketing year..........more detail