Putting huge wheat stocks in perspective
Farm and Ranch February 8, 2010 The large world supplies of wheat are certainly bearish. But Mike Krueger of M-K Commodities in Oregon says the world is a different place now than it was the last time we saw these levels of wheat stocks. Krueger: “Maybe the difference now is, that while that was considered a huge surplus in 2002 it is really only ten days or two weeks of usage. And the world was oblivious of that until 07-08. So now if we start to see production problems the market is going to be far more sensitive to it than it was for a lot of years prior.” Krueger says it wouldn’t take too many problems to make life interesting later this spring and summer but if there is a crop as big as last year he says we are going to suffer. Then of course there are the increasingly important outside influences. Krueger: “If the inflation mongers get their blood up even further they are going to rush in and buy more commodities and that can send us higher than we fundamentally deserve to be. Although conversely if we walk in some morning and European banks are falling and counter party risk dominoes are triggering and everyone runs to the dollar gain, we could have a pratfall.” Tomorrow, Krueger specifically on soft white wheat, which he says may need some price rationing. I’m Bob Hoff and that’s the Northwest Farm and Ranch Report on the Northwest Ag Information Network.
