Former Farm Bureau economist provides grain outlook

Farm and Ranch January 26, 2010 There wasn’t anything surprising in the outlook for wheat given by former American Farm Bureau Federation economic analyst Terry Francl when he spoke at the Federations’ annual meeting in Seattle recently.

Francl: “So in terms of what we have in the wheat market, that is kind of the bottom line for all of this. We just have a lot of wheat.”

Francl says even though winter wheat acres are expected to be down four million acres in the U.S. wheat ending stocks won’t go down much.

Francl: “There is something called cross elasticity, it is the impact corn and soybean have on wheat, vice-versa, and so those also suggest we are probably going to have lower wheat prices than higher wheat prices.”

Here are the price ranges for wheat futures Francl gave at the Farm Bureau meeting two weeks ago.

Francl: “As we look at this going ahead. Probably over the next few months we are probably going to see wheat trade in that $5 to $6 range. Not a whole lot new there. And then as we get out into the spring, maybe a little question as we get into spring towards harvest but more than likely pressure that could very likely take those prices down to the 4.50 level. Perhaps under some circumstances a little less than that.”

For corn Francl said uncertainly over acreage and planting prospects in the spring could bid corn into the $4.50 to $4.75 range but a normal fall crop would see prices backing off potential to a $3.75 bottom.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.