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Published January 31, 2008, 12:00 AM

Demand for wheat steady

The Minneapolis spring wheat futures markets have been on fire lately. In fact, the March contract traded up the 30 cent limit several days in a row. On some of those limit up days it could have traded as much as 60 cents higher. Wheat futures markets in Chicago and Kansas City have not been nearly as strong. The difference is that we are going to get very close to actually running out of spring wheat before the next harvest. Supplies of winter wheat are tight, but not as small as spring wheat.

By: Mike Krueger, The Jamestown Sun

The Minneapolis spring wheat futures markets have been on fire lately. In fact, the March contract traded up the 30 cent limit several days in a row. On some of those limit up days it could have traded as much as 60 cents higher. Wheat futures markets in Chicago and Kansas City have not been nearly as strong. The difference is that we are going to get very close to actually running out of spring wheat before the next harvest. Supplies of winter wheat are tight, but not as small as spring wheat.

The demand for spring wheat has not slowed despite prices now being over $13 a bushel. The export demand has stayed very strong. In fact, we have now sold more spring wheat for export than what the USDA said we would sell in the entire marketing year. That marketing year doesn’t end until May 31. That means we have four months to go in the export year. That is what has started to frighten people. Unless the export pace goes to zero we will run out of spring wheat, or get close to running out. That has left traders unwilling to sell Minneapolis wheat futures.

The other factor that has kept spring wheat prices so strong is the unexpected decline in hard red winter wheat plantings. Most analysts were looking for 2 million more acres and the January report said acres were actually smaller than last year. That means the market needs more spring wheat acres in 2008.

The super strength in old crop spring wheat futures has dragged new crop spring wheat futures to well over $10 a bushel.

No one can predict when this market will finally top out, but one thing in its favor is the calendar.

Krueger is the host of “The Money Farm,” a

syndicated radio and television program on

grain marketing and is a licensed commodity

broker. He can be reached by e-mail at

mike@themoneyfarm.com.

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