Wheat prices are soaring and they may go higher according to some market sources.

The reason for the price surge was cited as drought conditions in the western United States, low inventories and higher demand from foreign markets for U.S. grain.

Wheat closed at $7.86 a bushel Thursday, up 48 cents from the last Times & Free Press market report on Monday. That is up from the $5.50 range available to producers last June during harvest.

While the wheat sowing season is approaching its end, Kingfisher County OSU Extension Director-Agriculture Educator Bryan Kennedy speculated there would be no additional acres drilled in the county due to rising prices but there may be more acres go to harvest from acres of wheat that would have been used for graze-out in the past. He said that due to weather-related late planting this year, the chance of cold weather-reduced grazing potential has to be considered.

He added that this year poses the greatest gamble producers have ever faced.

“Producers need to evaluate their programs from start to finish,” he said.

Much higher costs for fertilizer and weed control products have already been experienced and the volatile oil prices must be considered.

Farmers are going to sharpen their pencils but they also need to keep their erasers handy, he said.

He said what might seem reasonable now may be completely backward when decision time comes.

He suggested as one protection forward contracting 10% of yields, but not as much as 50%.

Another “kicker” he mentioned was the possibility of overseas problems that could affect prices.

“It’s as scary as it’s ever been,” he said.

Market Watch stated:

Drought conditions in the U.S. and elsewhere are behind the tight supplies and price gains for a wide range of commodities, including oats, wheat, soybeans, coffee and even livestock.

Among the regions hardest hit by drought this year is the western third of the U.S., extending across the northern plains and Canadian Prairies, says Dale Mohler, AccuWeather senior meteorologist. “At one point, areas from the northern Rockies to the Dakotas were 10 [to] 15 inches behind normal” in rainfall — and in the far western and southwest U.S., the drought has been long term — just over a decade.”

Meanwhile, Kingfisher County is rolling long ahead with favorable moisture supplies thus far including a shower Wednesday afternoon that provided a nice drink for the recently emerged small grain crop.

Oat prices have “skyrocketed” as a result of drought in the Northern Plains, says Darin Newsom, president of commodity analysis provider Darin Newsom Analysis. And this year’s production of U.S. wheat planted in the spring is expected to be the smallest in a decade due to drought, he says, adding that there’s a similar situation for spring wheat expected across the Canadian Plains. In October, the U.S. Department of Agriculture lowered its estimate for domestic hard red spring wheat production by 8 million bushels to 2.97 million bushels, as drought conditions led to a smaller harvest.

But Newsom pegs corn and soybeans as the two major crops affected by drought, as “both are key food commodities for the world’s largest buyer: China.”

With all the “craziness seen in stock markets these days,” Newsom said he would “feel safe in commodities,” which are easier to read and invest in because they are closely tied to their real fundamentals. Those include supply and demand.

“Global demand remains robust at record, or near-record, levels, with foreign buyers aggressively purchasing wheat supplies during the past several weeks,” says Sal Gilbertie, president and chief investment officer at Teucrium Trading.

The U.S. Department of Agriculture estimates 2021-2022 U.S. wheat ending stocks at 583 million bushels, the lowest since the 2007-2008 marketing year.

Wheat supplies dropped after a drought in the northwestern U.S. Plains reduced the production of hard red spring wheat and durum wheat, says Todd Hultman, lead analyst at commodity information and analysis provider DTN. The USDA estimates domestic 2021-2022 wheat production at 1.646 billion bushels, down 10% from 2020-2021 — the smallest crop in 19 years, according to Hultman.

The Oklahoma Wheat Growers Association website commented:

This year’s expected harvest for hard red winter wheat could be rather average. But thanks to high prices for the grain per bushel, farmers should expect to see higher profits nonetheless.

Per-bushel prices are currently trading above $7 on the Chicago Board of Trade (and nearly $7 at elevators in Oklahoma), which is about $2 per bushel higher than last year. These prices are prompting some growers in Oklahoma who typically graze cattle on their wheat to harvest a mature crop instead.

The harvest generally starts in late May, and depending on weather conditions and the maturity of the crop, can last two to three months.

Later the website reported:

How does the 2021 wheat harvest look compared to last year?

The annual evaluation examines recent conditions involving wheat grown across nine regions of Oklahoma, with predictions made on numbers of acres harvested, average per-acre yields and a harvest total for the year.

This year’s prediction estimates growers will harvest about 2.99 million acres, an average per-acre yield of 37.1 bushels and a total harvest of about 111 million bushels.

Compared with 2020, the number of acres expected to be harvested is more, but the expected yield in bushels per acre is less.

Still, if predictions hold, the total harvest will be higher than last year’s 104 million bushels and higher than the 10-year median of 101 million bushels harvested in the past decade.

Regarding the northwest-central Oklahoma zone, which includes Kingfisher County, Greg Highfill, OSU Extension agent in Alva, said wheat In northwestern-central Oklahoma is looking good, so far.

“What we found overall was an excellent stand of wheat,” he said.