The wheat harvest is nearly complete in Oklahoma and the harvest has progressed into northern Kansas. Oklahoma’s wheat production (~160 mb) is above pre-harvest expectations. Test weights were mostly above 60 pounds in southern Ok and above 58 pounds in northern Ok. Protein averaged about 10.6 percent in southern Ok and about 11.5 percent in northern Ok. The Kansas wheat harvest has progressed into northern Kansas. Yields may be slightly higher than expected, test weights are near 60 pounds and protein is between 11.5 and 15 percent.

   The International Grains Council raised its world wheat production estimate to 24.2 billion bushels (bb). The IGC raised the production estimates for the EU, Canada and China. USDA estimates world wheat production to be 24.4 bb. The USDA will release the July supply and demand estimates on Friday, July 11.

   Corn may begin to provide a floor for hard red winter wheat prices. The KCBT Sept wheat contract closed today at $9.12 and the CBT Sept corn contract closed at $7.59. Oklahoma cash wheat basis range from about a minus 80 cents to a minus $1.15. Using a minus $1 basis, the Ok cash wheat price is $8.12. Corn delivered into central Ok cost about 65 cents over the CBT Sept contract price ($8.24). Some analysts say that wheat needs to be about 20 less than corn to start using wheat as feed. From a feeding perspective, wheat has about the same energy content as corn and slightly more protein. Energy is the limiting factor so wheat has about the same feed value as corn.

   Lower wheat prices will depend on how much corn yields were reduced due to the floods, how corn recovers from wet fields and how hot and dry it gets this summer. Both U.S. and world wheat ending stocks are projected to increase. Corn ending stocks are projected to dramatically decrease. Unless a major wheat crop is lost, corn will be the driving force behind wheat prices.

   It cost about 30 cents to store wheat between July 1 and Nov 15 (commercial storage costs ~ 3 cents/mo, interest costs ~3.5 cents per month, total cost ~6.5 cents/bu/mo). This implies that there is greater than a 50/50 chance that storing wheat will be profitable. Consider selling up to one-half of the wheat now and one-fourth in late September or early October and the remainder in mid-November. Unless something happens to reduce corn production expectations or there is a major wheat crop failure, wheat prices peaked on June 26. If you cannot afford price and storage risk of $1 per bushel, consider selling it all now.