Red protein wheats and premiums

Farm and Ranch April 5, 2010 After digesting the numbers in last week’s USDA grain stocks and prospective plantings report Mike Krueger of the Money Farm still does not see any reason wheat prices in general need to go up. But when it comes to red protein wheats the story could be different.

Krueger: “Last year’s Canadian and U.S. spring wheat crops were low protein. The hard red winter wheat crop was low protein. We have seen protein premiums for 15s go to exceed $5 over the Minneapolis contract. Not record high but certainly up in the stratosphere. We still have the steep discounts for low protein and they will probably not go away. And it looks to me like if the weather pattern continues to be relatively cool and wet in the U.S. hard red winter wheat belt, as it has been, the odds are we are looking at another possibly or potentially low protein hard red winter wheat crop again, which means there are going to be significant price differences between the different levels of protein.” :

As for Canada’s wheat production in 2010:

Krueger: “The Canadian crop I believe is going to be smaller because it looks like they are going to plant fewer acres of wheat, a lot more canola. We won‘t get those numbers until late April. And also they may be on the edge of what could be some weather issues with drought.”

In the USDA report last week farmers said they intended to plant 13.9 million acres of spring wheat this year, an increase of five percent. Of that total about 13.3 million acres is hard red spring wheat.

I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on Northwest Aginfo Net.

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