On Oct. 12 and 13, wheat could have been sold for $3.58 per bushel. After subtracting three cents per bushel per month storage and 4 percent per year interest, the net price for wheat sold on Oct. 12 or 13 was $3.45. The central Oklahoma and Texas panhandle June 20, 2005, price was $3.17.

The following prices quoted are the cash price minus storage ($0.001 per day) and interest ($0.0001 per day). Storage and interest costs were assumed to start on June 20.

Between June 20 and Aug. 17, wheat prices ranged between $3.17 and $2.99. Prices peaked on Aug. 29, fell back to $3.14 on Sept. 8 and the increased to $3.42 by Sept. 23. Prices ranged between $3.36 and $3.45 between Sept. 23 and Oct. 17. Since Oct. 18, wheat prices have ranged between $3.14 and $3.36.

The single best time to sell wheat was between mid-September and mid-October when prices were between $3.30 and $3.45.

Marketing strategies that may have been used to sell 2005 harvested wheat were to sell all wheat at harvest, store and sell in October, store and sell in November, sell in one-third lots in June, October and November or sell the wheat and buy call option contracts to offset the cash sale.

Of these, the single best strategy would have been to sell in mid-October for $3.36. Selling all the wheat at harvest netted $3.17. Selling in one-third units in June, October and November netted $3.25 and selling in November netted $3.22.

Selling all wheat at harvest and buying an “at the money” KCBT December wheat call option contracts netted $3.03 per bushel. The problem with selling and buying call option contracts was that 14 cents of the price increase was due to the basis increasing and the KCBT December call option premium was 25 cents.

Before harvest, the market offered two opportunities to “lock in” a price greater than $3.15 per bushel. For 10 days in mid-September 2004, and for six days in mid-March, wheat could have been forward contracted for $3.15 or higher.

Wheat prices have been on a small “roller coaster” with cash prices, before storage and interest, ranging between $2.99 and $3.58. Currently, the cash price is $3.40 before storage and interest and $3.25 after.

High corn stocks and low corn prices will limit wheat price increases. Relatively tight world and U.S. wheat stocks will result in volatile wheat prices.

Unless Argentina or Australia’s wheat production is less than expected, cash wheat prices should continue to trade between $3.30 and $3.50. After storage and interest, the range is expected to be between $3.15 and $3.35.

World and U.S. wheat stocks are tight enough that if problems occur with the 2005 U.S. winter wheat crop, prices will dramatically increase. Expect a “weather market” in later winter and early spring of 2005.