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King wheat

While corn has been making inroads in North Dakota, spurred by the demand for ethanol, wheat still is king, said Willow City, N.D., farmer Jim Diepolder, the president of the U.S. Durum Growers Association.

While corn has been making inroads in North Dakota, spurred by the demand for ethanol, wheat still is king, said Willow City, N.D., farmer Jim Diepolder, the president of the U.S. Durum Growers Association.

North Dakota farmers long have led the nation in the production of spring wheat, which is used to make bread, and in durum, the wheat variety used to make semolina flour for pasta.

Wheat prices rose above $10 a bushel for the first time ever Monday because of short supply and strong global demand. The price of durum hit a record high last month at about $18 a bushel, compared with about $4.20 per bushel at harvest time in 2006, Diepolder said.

Diepolder, who grows spring wheat and durum, said 85 percent of North Dakota durum was sold when prices hit $10 a bushel at harvest.

He wished he had durum to sell at the record prices last month.

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"Ten bucks is good, but $18 is better," Diepolder said.

"The big joke is that nobody's got any," Diepolder said. "There's an odd guy out there who still may have some - and you got to be happy for that guy because he'll hit it good."

This year's spring wheat crop in North Dakota is estimated at 234 million bushels, and durum at 43.8 million bushels, Johnson said. Winter wheat is estimated at 22.2 million bushels.

Early Christmas

Last year at this time, spring wheat was fetching about half of what it is now, said Jim Peterson, the marketing director for the North Dakota Wheat Commission.

"This is a Christmas that producers have been hoping for a long time," Peterson said. "The only downside is there is not a lot of wheat to sell at these prices.

"Right now, the market has gone up faster than cost, so producers still are in the black," Peterson said. "It gives a little bit of optimism for 2008."

Mark Haux, a commodities broker with Forks Commodities of Grand Forks, said business has been steady, but he hasn't noticed a big increase in activity since wheat prices have spiked.

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Bob Lebacken, a commodities broker with RML Trading of Grand Forks, said the market has been especially volatile lately, partially fueled by funds looking for investments with good returns.

"There are days we have a 30- to 40-cent trading range in a single day," Lebacken said. "A few years ago, it used to be months before you would have a 40-cent trading range."

Lebacken said the vast majority of this year's spring wheat crop already has been sold at lower prices than what wheat currently is fetching on the spot market.

"If you already have sold your crop, you can't really capture the price," Haux said. "The people who haven't sold, I would suggest to sell at these prices."

Haux said he hasn't seen a lot of selling into the market because most producers already have sold their wheat supplies. He said poor crops from other parts of the world have created more demand for American wheat, driving up prices.

But Lebacken said commodities prices are difficult to predict and said extreme fluctuations could be expected as a result of weather concerns and supply shortages.

Lebacken said without worldwide supply issues, the price of wheat next fall easily could be cut in half - to about what it was trading at a year ago.

But Haux said prices could remain high for some time.

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"The sky's the limit," he said.

Higher prices for producers translate into higher prices paid and charged by elevators.

"When wheat prices go up, flour prices go up with it," said Steve Sannes, sales manager with the North Dakota Mill in Grand Forks.

Seed shortage?

High wheat prices could translate into a shortage of seed stock with many producers already having sold all their inventory anticipating seed will be available, said Ken Bertsch, seed commissioner with the Fargo-based North Dakota State Seed Department.

"We really encourage all farmers to book their seed early," Bertsch said. "You may need to book seed for commodities earlier than you ever had to before."

Seed prices generally run $2 to $4 higher than what the grain is selling for at the elevator, Bertsch said. He said that could mean certified wheat seed selling for $13 to $14 a bushel.

Bertsch said it remains to be seen if historically high wheat prices result in increased wheat acreage since nearly every crop in the state is having a banner year.

"It is just competition between commodities," he said. "I have never in my lifetime seen farmers with a positive outlook about just about any crop they could grow in the state. That happens once every 30 years. It just so happens that we are getting to see it this year."

Herald Staff Writer Ryan Schuster and The Associated Press contributed to this report.

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