Wheat Economics

by Joe | Published August 18, 2016

Cash wheat is hovering around $3.10/bu. Even with good yields, this price is causing a lot of stress with producers.
If a producer has a 50 bu APH and buys 70% coverage at a $4.80/bu., the coverage is not good. Some producers will compare that to raising soybeans. November 17 futures are around $9.70/bu at the moment. If a producer has a 35 bu APH, 70% coverage would give approximately $238 per acre
One good producer said that he had a farm that produced 200 bu corn in 2015, was planted back to wheat that made 55 bushels per acre, then immediately planted back to soybeans that he thinks could make 40 bushel per acre. Using these production numbers, he thinks wheat fits well into his program. Those yields may be a good bit better than what many people would expect, but it does demonstrate what good management can produce.
Wheat planted back to wheat does not produce good returns at this point. Another producer is confident that he will price new crop 2017 wheat at something over $4.00/bu.

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