A historic inversion remains in place for the wheat markets, as soft red winter contracts remain at a much stronger premium than their hard red winter counterparts. Bryan Doherty with Total Farm Marketing says not only is the spread opposite what it should be, it’s the widest he can recall.
The spread for soft red or Chicago wheat contracts peaked in mid-October after surpassing hard red or Kansas City wheat at the same point a year ago. Doherty says he expects the spread to close over the next year, as feed demand adjusts to prices. He also expects global supplies to remain a factor.
Recent USDA estimates of the coming year’s winter wheat acreage suggest the crop could see its lowest production in 110 years, while unharvested spring wheat in the Dakotas and Montana have been impacted by an early onset of wintry weather.