In the first draft of this article I wrote, “Current wheat production and market conditions may imply that, during the 2025 wheat harvest, the world’s wheat supply may be below average. This situation implies above-average prices.” However, as I organized the market information and wrote about it, I realized that this conclusion may be wrong.  

I constantly read and listen to market reports and commentaries. My interpretation of the information indicated Russia may export less wheat than expected because drought conditions were delaying planting in major production areas. Add the fact that European (EU) wheat production will be lower than expected, and there appeared to be a case for higher wheat prices. I was biased by Russia’s and EU’s market power and the potential for lower Russian and EU wheat exports. 

This is a lesson for drawing conclusions and making decisions. Organizing and evaluating information without writing it down increases the odds of making the wrong conclusion or decision. 

As an example, let’s evaluate the world’s wheat supply and demand situation.  

Russia’s 2024/25 wheat marketing year stocks-to-use (S-T-U) ratio (ending stocks divided by annual use) is projected to be 8%. The 15-year (2009 – 2023) average S-T-U ratio is 15%. Russia’s 2024/25 wheat exports are projected to be 1.76 billion bushels (Bb) compared to a 5-year average of 1.52 Bb. Russia exported 2.0 Bb last year.  

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At the end of the 2024/25 wheat marketing year, Russian wheat stocks will be tight and Russian wheat prices will be higher. Just think what a below-average 2025 Russian wheat crop would do to wheat prices. 

It is also true 2024 EU wheat production is 4.52 Bb, compared to 4.96 Bb last year and a 10-year average of 4.86 Bb. The EU’s S-T-U ratio is projected to be 8%, compared to 10% last year and a 15-year average of 10%. What happens to the price if EU’s 2025 wheat crop is below average? 

The world’s 2024/25 wheat S-T-U ratio is projected to be 32% compared to a 15-year average of 34%. 

 This market information may imply that wheat prices should be above average, both now and during the 2025 U.S. hard red winter wheat harvest. 

The U.S. 2024/25 wheat marketing year S-T-U ratio is projected to be 41% compared to a 15-year average of 41%. Average prices? 

Then there’s the 2024/25 U.S. hard red winter wheat S-T-U ratio, which is projected to be 55% compared to 49% last year and a 15-year average of 50%. 

2024 Australian wheat production is projected to be 1.18 Bb compared to 954 million bushels (Mb) last year and a 15-year average of 976 Bb. Argentina’s 2024 wheat production is projected to be 661 Mb compared to 582 Mb last year.   

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Increased wheat production in the U.S., Australia, and Argentina offsets Russia’s and EU’s lower production.  

The bottom line is that wheat prices should probably be around the 15-year average price. 

At this writing, 2025 harvested wheat may be forward contracted in Pond Creek, Okla., for $5.71. The average 2009 through 2024 (16 years) Pond Creek harvest (June through August) price is $5.81. Over the last 16 years, the Perryton, Texas, average harvest price has been about the same as Pond Creek’s average harvest price.  

Wheat forward contract harvest prices often have a 10- to 15-cent price risk discount. Thus, $5.71 implies $5.81 to $5.86 (average) harvest prices and implies that the market expects average supply and demand conditions. 

Organizing and writing down the pertinent data increases the odds that the conclusions and decisions made will be the correct ones.