At this writing, the Kansas City Board of Trade July wheat contract price is $5.90. Some elevators in central Oklahoma and the Texas Panhandle are offering about 0.90 less than the KCBT July wheat contract for 2010 harvested wheat ($5.00).

The expected June 20, 2010 central Oklahoma wheat price is $4.75. The potential price range is $3.70 and $6.50. Problems with this prediction are that this range may not be wide enough and there are a tremendous number of uncertainties.

The 2009 Argentine and Australian wheat harvests are essentially complete. The next wheat to be harvested is in India, China, Pakistan and the Middle East. India’s wheat harvest is normally between March and mid-May. Harvests in Pakistan and the Middle East begin the first of April and run through June. China’s winter wheat harvest is normally between mid-May and mid-June.

About 24 percent of the world’s 2010-2011 wheat marketing-year production will have been harvested by June 1, 2010. Wheat production in India, Pakistan, the Middle East, and China will impact Oklahoma’s June 2010 wheat price.

To predict the June 2010 wheat price, estimates must be made for the value of the dollar, U.S. wheat exports and ending stocks, planted wheat acres, yields, and how much outside money (new term for funds) invested in wheat contracts will also impact 2010 harvest prices. The price impacts of the dollar value, wheat exports and ending stocks are related.

Since June, the U.S. dollar index has declined from about 81 points to about 74.5 points. This is an 8 percent decline in the dollar’s value relative to other major currencies. Since mid-September, the dollar index has declined from about 76.5 points to 74.5 or about 2.6 percent.

Between June and mid-September 2009, wheat prices fell $1.10, about 20 percent. Since mid-September, wheat prices have increased $0.80 or about 17 percent. The change in the value of the dollar may not have a direct impact on wheat prices. However, the declining value of the dollar may be one reason that outside investors are buying commodities.

A good example of the price impact of a declining dollar and outside investors is the $1.58 price rally (28 percent) between mid-April 2009 and mid-June 2009. There was little if any fundamental (supply and demand) reason for prices to increase.

During the April to June period, estimates of both U.S. and World wheat stocks were increasing. Estimates of 2009 world wheat production were also increasing. There was little change in expected demand.

During the $1.58 wheat price rally, the dollar index declined from 86.5 points to 78.5 or 9.2 percent. There was not a big increase in export demand.

Outside investor buying was the major reason for the $1.58 rally. Investors may have been buying commodities because of the declining dollar value and possibly because of inflationary fears. There is no way to know what outside investors will be investing in next spring and summer.

The 2010 U.S. winter wheat crop has been planted. Early estimates indicate that hard red winter planted acres may be slightly lower than last year. Estimates of soft red winter wheat planted acres indicate significantly less planted acres.

For reduced winter wheat production to have a major impact on wheat prices, 2010 winter wheat production needs to be about 1.3 billion bushels. The five-year average is 1.54 billion bushels. Given the current wheat crop condition, below average production is not very likely.

For 2010 wheat prices to remain at current levels, total U.S. wheat production needs to be below the 1.22 billion bushel average. Average or above production would result in another increase in wheat stocks and lower prices.

If you can’t afford lower wheat prices, consider forward contracting some (up to 20 percent) of the expected 2010 wheat production and selling wheat that is in storage.