Issue link: https://www.e-digitaleditions.com/i/1084252
Each year, I read and enjoy critiquing others' thoughts about what will happen in the upcoming year. This year, I've decided to put on old Punxsutawney Phil's hat and attempt the art of prognostication myself. Here are four things that I think have a chance to actually happen in wheat markets during 2019, why I think that's the case, and why I think I may be wrong. 1. Exports of hard red winter wheat will fall well short of USDA projections, but exports of hard red spring wheat will outpace last year's totals. Why I think this is correct: In October's USDA Foreign Agricultural Service's Wheat Prices Overview, the agency noted that U.S. wheat exports are projected to rebound to 2016/17 levels, after having a relatively down 2017/18 year. Source: USDA Foreign Agricultural Service Wheat Price Overview report, October 2018 However, it increasingly looks like this story may be true for only the higher-protein hard red spring (HRS) wheat. As shown in the below graphs of cumulative hard red winter (HRW) exports and HRS export volumes, HRW exports are running significantly below last year's numbers. However, exports of HRS wheat have been quite strong, outpacing last year's totals at this point in the marketing year and appearing to be on a trend to potentially reach 2016/17 levels. By Anton Bekkerman FOUR BOLD (BUT POSSIBLY WRONG) PREDICTIONS FOR WHEAT MARKETS IN 2019 Why I think I might be wrong: In the winter wheat market, the big question remains to be: What will Russia do? The country had a large 2018 winter wheat harvest and set prices exceedingly low in the beginning of the 2018/19 marketing year. However, there is some evidence that Russian wheat supplies have begun to diminish, which may increase the opportunity for U.S. HRW wheat to fill the demand. On the other hand, both markets may face challenges related to an increasing value of the dollar (I discuss one U.S. Hard Red Winter Wheat Exports Data Source: USDA Foreign Agricultural Service U.S. Hard Red Spring Wheat Exports FOUR BOLD (BUT POSSIBLY WRONG) PREDICTIONS FOR WHEAT MARKETS IN 2019 45 farm406