For the 2013/14 wheat marketing year (June 1, 2013 through May 31, 2014), the wheat price range for Oklahoma and the Texas Panhandle was about $2.22 cents (3 deuces). Medford Oklahoma’s price ranged between $5.88 and $8.09 and the Perryton Texas price ranged between $6.09 and $8.31.

During the last six marketing years (2008/09 through 2013/14 and starting with June 20 prices), the average annual price range was $2.73 and the yearly price ranges were between $2.22 and $3.29.

During the 2013/14 wheat marketing year, the average Medford Oklahoma wheat price was $6.90 and the average Perryton Texas wheat price was $7.13. The high and low prices were the average price plus or minus 16 percent. Medford’s five-year (June 2008 through May 2012) average wheat price was $6.41 compared to Perryton’s $6.28. It is interesting to note that for the five years prior to 2013/14, Medford’s prices averaged 14 cents above Perryton’s prices.

Reviewing the price pattern for the 2013/14 marketing year indicated that on July 1, 2013, the Medford wheat price was $6.74 and the Perryton wheat price was $6.94. Between early July and late September, the Medford prices stayed between $6.68 and $6.87. By October 8, the Medford price was up to $7.40 and traded in the $7.20 to $7.40 range until the end of October.

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By the end of January, the Medford price had worked its way down to $5.88. The price decline was mostly due to adequate world wheat stocks and good to excellent 2014 hard red winter wheat production expectations. Deteriorating HRW wheat crop conditions resulted in wheat prices increasing back to $8.09 in early May. Note that Perryton price remained about 22 cents above Medford prices.

The 2013/14 wheat price movements may be used to anticipate price movements during the 2014/15 marketing year. The 2013/14 price movements may indicate potential price levels, but the prices won’t indicate timing of the potential price moves. At this writing, the Medford wheat price is $7.10 and Perryton’s price is $7.11.

In the May 2014 WASDE report, 2014/15 U.S. wheat ending stocks were projected to be 540 million bushels, 43 million bushels less than the 2013/14 marketing year ending stocks. Tighter stocks during the 2014/15 wheat marketing year than during the 2013/14 marketing year may result in a higher average price than during the 2013/14 marketing year.

USDA has projected the U.S. average 2013/14 marketing year wheat price to be $6.85 (Medford’s average is $6.90). USDA’s projected 2014/15 marketing year price is $7.40. Using a $2.22 wheat prices range ($1.11 up and $1.11 down), the projected low price for the 2014/15 marketing year would be $6.29 and the high price level would be $8.51.

While 2014/15 U.S. wheat stocks are projected to be about 30 percent below average (hard red winter wheat stocks are projected to end the 2013/14 marketing year 44 percent below average), world wheat ending stocks are projected to be near the average.

Unless foreign wheat production is less than expected, average world wheat stocks should limit increases in U.S. wheat prices.

The wheat supply and demand situation is nearly the same as last year (relatively tight U.S. stocks and adequate world stocks). If foreign wheat production is less than expected, wheat prices could increase $1.11. If foreign wheat production is greater than expected, wheat prices could decline around $1.11. Three aces each direction would result in a three deuces price range.

One caveat, if a major foreign wheat crop is lost, wheat prices could increase more than $1.11. Conversely, a relatively large foreign wheat crop could result in prices declining more than $1.11.