While many growers are in the middle of getting their winter wheat planted or spring wheat cut, prices in both Chicago and Kansas City still remain at near $7/bu. or higher and may call for some early 2011 marketing. That’s the thought of Mark Welch, Texas AgriLife Extension grain marketing specialist.

Welch has encouraged growers to consider some early marketing, as is shown by his early 2011 wheat marketing. He sold 20% of the projected crop in mid-summer at the $6.50 level. In late August, when wheat rallied to $7.50, he booked another 20%.

“It is much too early to know whether supply and demand fundamentals in 2011 will support prices at their current levels,” says Welch. “But with prices well above my expected cost of production, I want to have some new-crop sales locked in. My plan is to hold these positions and see how planted acres and early season crop conditions develop this fall.”

He points out that although wheat was down last week, prices are still above $7. The July 2011 contract closed down 9.5¢ on Thursday, but was lower by another 17¢ earlier in the session. “I am still comfortable with the level of preharvest sales I have made at this time,” he says. “We have a long way to go before the supply-and-demand picture for 2011 becomes clear, but these are profitable sales levels and I want to have something locked in.”

Tom Fritz, grain marketing analyst for EFG Group LLC, says basis levels for U.S. wheat remain unchanged. “Demand is deemed as ‘okay’ vs. more-than-ample demand,” he says. “The Black Sea’s wintering condition is improving with recent rainfall and the call for more. The situation is Australia hasn’t changed. The west is dry and the east appears to be great shape.

“Recent rainfall in Argentina has that crop in good shape so far. The eastern U.S. soft red winter wheat seeding is going along but it is dry. Hard red winter wheat seeding is happening as well. It is dry in those areas, but there are hints of decent rainfall developing (early this week).”

Fritz says $7-7.10 futures prices represent the first resistance level. “I would much rather sell a rally vs. selling a break,” he says. “Volatility is high enough that one can be patient and wait for the rallies to sell.”