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Strategies & Market Trends : Bosco & Crossy's stock picks,talk area
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To: jayt who wrote (17735)2/18/2006 11:28:13 PM
From: gcrispin  Read Replies (2) of 37387
 
I own farmland where we grow soft white wheat. What I think you see is that marginal land is coming out of production in the US. Also, there are different varieties of wheat so it so you have a variety of markets.

If you look at the statistics, production acres are going down and yield is increasing. There is also an increase of wheat coming out of Eastern Europe as they mechanize and improve their transportation. A large determining factor to the price of soft white wheat is how much China imports.

Lots of grains are also used in feeding livestock. A high cattle price helps the price of corn and wheat. With ethanol plants springing up, that could be a variable in the mix.

Finally, farmers are looking at ways to use less fuel. There are no till farming applications that cut down on the number of times a farmer goes over the ground.

Add the variable of weather and you have quite a number of pieces to the puzzle that makes up the price of wheat.
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