I’ve been following along with this debate.

Yes I understand the perception that $7 Corn is headed to $3 or whatever and the funds are currently short over 500 million bushels of wheat..  over a third of the crop. 

Let’s review.

In Kansas City wheat.. the high was $13.79 on 5/20/22 (2 months after my father passed) after Russia invaded Ukraine in February of 2022 as the world seriously considered the ramifications of the largest suppliers (Black Sea) of exportable supplies. 

As the 2022 crop came in prices fell $5.72 to $8.075 on 8/19/22.

Then an extremely dry fall occurred as prices rallied back to $10.375 on 10/14/22.  Most of our fall sown HRW wheat did not emerge until February of 2023.

Here for many the 2023 crop was the worst in our careers.  Several operations did not harvest a majority of their intended acreage.  3,000 acre operations killed all but say 250 acres for seed.  My cousin out at Kingsdown (south of Dodge City) did not harvest a single acre of wheat.. for the first time in their career.

90 miles east we harvested about 92% of our sown acres.. during a period where it rained 25 out of 50 days.. we finally abandoned the last on July 2? 2023 due to Kochia (pigweeds) over taking about 10 bu dryland wheat.. plus the grain was sprouted by then.  Our best dryland field did over 30.. and rains were not overly excessive until July the 4th with only.. 67% of our acreage completed.. (but thankfully the irrigated completed that day) we received about an inch and a half.. off two days.. start again.. rains.. off.. start.. rains.. off.. start.. rains.. off.. start.. rains.. etc.

it sucked.

Our local elevator took in 37% of a normal crop.

When we threw in the towel.. the rains also stopped ( you got to be kidding me?)
Three weeks later we had a week of 105 with 25 mph winds.. (ouch) which put the hurt on (but at least we should have a) fall crop.

We got a few days of reprieve and maybe 0.50” followed by a week of 106 (peak of like 109 at Dodge) with 30 mph winds.

This literally fried the dryland soybeans.. as probably 40 to 50% of those acres appraised at less than 5 bu.. and remain uncut today.

The irrigated corn was decent.. maybe 67% of a normal dryland sorghum crop.. as later rains returned in early September followed by another dry fall slightly less severe than the one before.

As I type this.. 95% of my wheat is emerged.  Those who have planted fence posts.. (or buried a beloved dog like us) found some moisture.. well.. we could go down about 20” in Sand before needing a Jack hammer to go any deeper to bury the dog.. in sand.

We remain in a D2 drought.  Our soil moisture is Severely depleted below a foot.  With normal rains.. I would expect about 50% of our APHs.. as we’ve drained any banked moisture last year.. and really haven’t seen much (some.. it started but) not enough to really recharge.

In the Benner 89 year cycle.. the 1930s had two droughts early.. then some rains.. then 1936.. literally put “the dirty” in the “dirty 30’s” as it stopped raining.. and there were no reserves (and they one way plowed everything ..) thus no cover left.

we are slightly better.. better practices.. some cover.. if it hasn’t been baled off to feed livestock.. but we’ve pulled more out of the soil to raise better crops.. and weeds.. (best kochia crop I’ve raised in decades this year) then the 30’s.

Wheat prices fell to $7.3625 on 6/5/23 before the start of harvest.

Rallied to $9.2975 on the crappy harvest.. but have since deflated on MASSIVE FUND SHORT SELLING again they currently are short 500 million bushels.. to last weeks low of $5.95.. a $3.35 plunge.. where China found value.

The previous two rallies have advanced $2.30 and $1.94.. so a $2 rally from last week would take us to just under $8.. $7.95 ish.. which in the grand scheme.. wouldn’t be that much of a shocker.. given that we probably have about 20% of normal stocks in the country.

Historically 67% of the crop is sold by now.. and what’s left is sitting in terminal storage.. probably hedged.. but the commercials have already bought the vast majority of what’s coming.. while the funds wait for new crop.. to drive prices lower..  if we have a new crop..???

Personally I think we could pop prices pretty good.. and will wait for the funds to cover.

cheers. 

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