WHEAT SCOOPS: Wheat prices? How low or high can they go? (2024)

FAQs

Are wheat prices expected to go up or down? ›

However, despite this momentary rally, the broader outlook remains pessimistic, with wheat prices projected to decrease by 14% in 2024 due to an oversupply and record harvests.

Over the last year, world wheat prices have trended steadily lower, continuing their fall from the highs hit in May of 2022 after Russia invaded Ukraine. Ample wheat stocks from Russia and record exports flowing from the Black Sea continue to weigh on global wheat prices.

Wheat futures reverted back to their downward slides Wednesday after the US Department of Agriculture indicated ample supplies of US wheat from this year's harvest may override global export concerns amid shrinking wheat production in Russia.

A shortage occurs, since the quantity demanded is greater than the quantity supplied. The shortage will bring market forces into play, as consumers will bid up the price in order to purchase more wheat. This process will continue until the market price returns to the equilibrium market price, P*.

Recently, all eyes are on the wheat shortage, as experts warn it could spark a global food crisis. The world's wheat supply is under immense pressure as the conflict in Ukraine as well as increasingly devastating weather events threaten production around the world.

U.S. wheat ending stocks in 2024/25 are projected at 766 million bushels, up 11 percent from 2023/24, which would be the highest level since 2020/21. Total supplies are up 6 percent from the previous year with larger beginning stocks and production more than offsetting lower imports.

Wheat sees its largest daily percentage decline since June 2023. Wheat prices are sinking as the crop progress shows advances in the harvest. The Russian wheat harvest woes are likely fully priced in as conditions improve. Plenty of volatility in wheat from the recent selloff offers healthy premiums.

The price of wheat is determined by supply and demand factors, in particular the price of oil, global population, income growth, price of substitutes and climate factors affecting the supply.

From January 2023 to present, world wheat prices are down $77/MT, on average. Russia's influence in the world market is driving this trend in world price levels. According to the October World Agricultural Supply and Demand Estimates, Russian production was estimated at 85.0 MMT, 5.0 MMT above the five-year average.

Using USDA's reported average monthly 2009 through 2023 Oklahoma wheat prices (Texas Panhandle wheat prices follow the same price pattern), the average June through August price averaged 25 cents more than average September price. After September, price averages continue to decline.

Why is wheat getting expensive? ›

Geopolitical tensions continue to stress the market

The invasion of Ukraine severely disrupted the wheat market. Wheat prices surged to unprecedented levels and immediate concerns about food shortages were raised (Trading Economics, 2022).

Grain prices plummeted. Simultaneously, farmers faced rising production costs, like increasing oil prices. The Midwest states, which grow the most corn, soybeans and wheat, were most affected.

In NASS's first winter wheat production forecast for 2024, production is expected to increase 2% from 2023. As of May 1, the U.S. yield is expected to average 50.7 bushels per acre, up 0.1 bushel from last year's average of 50.6 bushels per acre.

Interactive chart of historical daily wheat prices back to 1975. The price shown is in U.S. Dollars per bushel. The current price of wheat as of June 13, 2024 is $7.0315 per bushel.