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| Haymaker you make some good points, but keep in mind without those speculators, wheat futures would likely be $2 lower. You could have your old basis back then, but futures will be A LOT lower.
I agree the KC wheat contract is broken and steps are underway to remedy that problem, although I don't have a lot of faith in the early changes that are being talked about right now. In the end, it needs to be a deliverable contract for everyone, not just the big boys in delivery locations.
As far as acres go this fall, we will see an expansion if prices stay up here around current levels. Even at $1 under basis a $6.50 July 2011 KC wheat futures price is offering plenty of incentive to plant wheat for most. Chi wheat is the same with the basis situation not quite as ugly there after the reduced acres/production this year. We will still plant plenty of wheat.
One thing to keep in mind, we can raise half the crop we did this year next year and assuming current usage estimates, we theoretically wouldn't run out of wheat. That is a bit spooky. | |
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What happened to the wheat basis
