At this writing, the central Oklahoma and the Texas Panhandle cash wheat price is about $5.35. The Kansas City Board of Trade March wheat contract price is $6.16. The KCBT July wheat contract price is $6.40.

The KCBT March and July wheat contract prices have established up-trends. If you have wheat in the bin, watch the KCBT March wheat contract. The March contact has price support at $6 and resistance at $6.50. Prices below $6 will imply the up-trend has been broken. Prices above $6.50 imply that the up-trend will continue.

The KCBT July wheat contract price has support at $6 and resistance at $6.50. To continue the up-trend, July contract prices must break through the $6.50 resistance level.

The Oklahoma/Texas June 2009 wheat forward contract basis is about a minus 85 cents. Wheat may be forward contracted for harvest delivery for about $5.55 ($6.40 – $0.85). The June 2009 wheat contract basis range is between minus $1.10 and minus $0.80.

The June 2009 cash wheat price is expected to be to be $5.75. June 2009 wheat prices may be as low as $4.50 or as high as $7.50.

June 2009 wheat prices will depend on U.S. and world wheat stocks, 2009 U.S. winter wheat production, including hard red winter and the world’s 2009 potential wheat production. The current wheat stocks estimate for May 31 is relatively accurate. Wheat production estimates for 2009 are relatively inaccurate.

World wheat ending stocks are projected to be 5.4 billion bushels compared to 4.4 billion bushels last year and a five-year average of 5.1 billion bushels. World ending stocks increased one billion bushels or 26 percent.

United States wheat ending stocks are projected to be 623 million bushels compared to 306 million bushels last year and a five-year average of 499 million bushels. This is a 317 million bushel increase or a 104 percent increase.

Oklahoma and Texas Panhandle wheat prices peaked on March 12, 2008, at $12.50. The June 20 wheat price was about $8.25. Wheat prices bottomed on Dec. 5 at about $4.30. At this writing, the cash price is $5.30.

The USDA winter wheat seedings (2009 U.S. winter wheat planted acres) estimate will be released Jan. 12. Soft red winter wheat planted acres are expected to be significantly less than last year. Hard red winter wheat planted acres are expected to be slightly less.

Fuel and fertilizer prices were at record levels when the winter wheat was planted. Many producers just applied sufficient amounts of fertilizer to establish a wheat stand. Fertilizer prices have declined but with relatively low wheat prices, some producers are reluctant to top-dress wheat with nitrogen fertilizer.

It is also dry in much of the hard red winter wheat area. Lower soil fertility, dry soil conditions, near record low temperatures and less planted acres all point to less wheat production than last year.

There are also reports that, while the world has excess wheat, there is a limited supply of milling quality wheat. Argentina is expected to produce 386 million bushels compared to 599 million bushels last year and a five-year average of 533 million bushels.

Australia wheat production is projected to be 735 million bushels compared to 479 million bushels last year and a five-year average of 673 million bushels. Australia’s wheat quality was greatly reduced by a rain delayed harvest and drought conditions during the growing season.

The size and quality of the U.S. winter wheat crop will be determined by the number of planted acres and the weather in March, April and May.