A lot of money is flowing into commodities these days, and wheat has been rallying big time. John Heinberg is a market advisor with Total Farm Marketing in West Bend. He tells Mid-West Farm Report the global demand for wheat is high.
He says the U.S. and Canada have had some issues in terms of production of spring wheat due to weather conditions. Globally, there’s tight supply of wheat available to exporters even though global supply numbers look good, Heinberg explains. The problem is that there’s just not a lot available for importers.
Heinberg notes Total Farm Marketing continues to watch wheat demand on the global scale. He says it feels like right now, importers are trying to secure supplies and are probably underbought from where they’d like to be. He adds the market is probably getting away from them. Heinberg says sales announcements shows wheats are leading three-to-one compared to other grains, indicating strong demand.
Also in the conversation with Farm Director Pam Jahnke, Heinberg explains a few simple tools that farmers might want to use to cover their risk, including the “put strategy” — a fixed risk strategy to put a floor on the market. A “call strategy” is a reownership strategy for farmers, he explains. It’s going to be expensive to produce next year’s crop, so Heinberg recommends having these conversations now.