Who would-ah-thought that we would have declining and very tight wheat stocks and declining prices?  Possibilities: economic theory is being molested, the market is being manipulated to take advantage of producers, or world stocks have trumped U.S. wheat stocks.

For the 2012/13 wheat marketing year (June through May), the average marketing year wheat price was $7.77 based on 718 million bushels in ending stocks. The projected price for the 2013/14 marketing year is $6.85 with projected ending stocks of 583 million bushels. Ending stocks declined 183 million bushels and prices declined 92 cents. “Go figure.”

For the 2012/13 marketing year, hard red winter (HRW) wheat ending stocks were 343 million bushels. HRW ending stocks for the 2013/14 marketing year are projected to be 193 million bushels. Oklahoma’s average annual wheat price for 2012/13 was $7.45 and is projected to be $6.98 for 2013/14.

For the 2014/15 wheat marketing year, U.S. wheat ending stocks are projected to decline from 583 million bushels to 540 million bushels. The USDA has not released a 2014/15 marketing year ending stocks estimate for HRW wheat. Some analysts are projecting a decline in HRW wheat stocks.

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With less wheat in the bin and an expected smaller 2014 HRW wheat crop, you would expect wheat prices to be higher now than at the beginning of the 2013 HRW wheat harvest. At this stage in the harvest last year, the average central Oklahoma June 2013 wheat price was $7.19 ($7.08 – Texas Panhandle). The current price with less wheat is $6.96 for Oklahoma and $6.84 for Texas— lower stocks and a lower price.

The USDA projects 2014/15 U.S. wheat production to be 7.7 percent of world wheat production. Twenty-years ago (1994/95), U.S. wheat production was 12.1 percent of world wheat production.