Uncertainty on prices plagues wheat markets

It's time someone figured out what's going on in the wheat market. Harvest, which starts in the Texas Plains, is heading north and harvest prices which should be at the low points are staying in the same northerly direction. What's confusing, even to veterans of the commodity game, is that there is no shortage of wheat. The fact is, the United States alone may produce over four billion bushels. World wheat production may also push record levels.

As for expanding exports to the rest of the world, rising interest rates coupled with a strong dollar (hitting new highs at time of this writing) and a questionable world economy makes likelihood low.

So where will much of this fine wheat find a home? Analysts last year were caught off guard by the amount of wheat feeding that went into the livestock ration. An unprecedented amount of wheat took the place of traditional feedgrains--barley, corn and sorghum. This year the trend appears likely to continue, despite higher than expected prices, and as high as expected supply.

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