Since 1984, economist Kim Anderson has been penning Wheat Scoops for Farm Press. At the end of July, he retired from Oklahoma State University but agreed to continue to write his column. Rather than only focusing on wheat, Anderson is expanding his scope to include grains such as corn and sorghum. His column will now be called Grain Scoops.  

Prices can’t be predicted with sufficient accuracy for most people to make money buying and/or selling commodities. But for planning purposes, farmers must keep up with the markets and use predicted prices to determine the use of their resources (land, labor, capital, and management).  

Market information (data), by itself, is of little to no value unless there are benchmarks to compare the data. Then there’s the TMI (too much information) problem. With the internet and other information sources, it’s easy to get overwhelmed. Some market analysts recommend starting with a few good market benchmarks, which may be average prices and stocks-to-use (S-T-U) ratios. The S-T-U ratio is the commodity’s marketing-year ending stocks divided by total use converted to a percentage. 

Average prices may be local, regional (state), national (U.S.), and/or world. Stocks-to-use ratios are normally U.S. and world. Sometimes major production and/or exporting countries’ S-T-U ratios may also be used. 

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It’s important that the benchmarks be readily available. For most agricultural commodities, the USDA monthly WASDE (World Agricultural Supply and Demand) report, yearbooks, and other reports are excellent resources.  

Benchmarks, obtained from USDA reports, for corn and wheat are shown in Table 1. History shows there was a permanent upward shift in corn and wheat prices during the 2007/08 and 2008/09 marketing years. Therefore, the 2009/10 through 2023/24 marketing year average prices and S-T-U ratios were used to calculate benchmarks. 

The 2009/10 through 2023/24 U.S. corn and wheat average annual prices were $4.20 for corn and $6.27 for wheat. The Texas average prices were $4.62 for corn and $5.85 for wheat. The Oklahoma average corn price was $4.89, and the average wheat price was $5.79.  

The 2009/10 through 2023/24 U.S. average corn and wheat S-T-U ratios were 13% for corn and 41% for wheat. The world’s 2009/10 through 2023/24 S-T-U ratios were 21% for corn and 34% for wheat. 

Average S-T-U ratios are expected to be associated with average prices. A U.S. corn projected S-T-U ratio of 14% would imply an average annual U.S. price of $4.20. A side note is that Texas’s average corn price is normally $0.43 higher than the average U.S. corn price. Thus, the 14% S-T-U ratio would imply an average Texas price of $5.05 and an average Oklahoma price of $4.89. 

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For both corn and wheat, the expected price ($4.62) could be adjusted up or down based on the world’s S-T-U ratio. 

Above-average S-T-U ratios imply below-average prices, and below-average S-T-U ratios imply above-average prices.  

At this writing, corn may be sold in Perryton, Texas, for $4.52. Using the average difference between average Perryton corn prices and U.S. prices ($0.43), the equivalent U.S. average price would be $3.99 ($4.52 - $0.43). 

The September 2024 WASDE projects that the 2024/25 marketing year U.S. corn S-T-U ratio will be 14%, compared to the 13% average. The world’s 2024/25 corn S-T-U is projected to be 25%, compared to a 24% average. Both the world and U.S. projected S-T-U use ratios imply slightly below-average corn prices. 

Wheat may be forward contracted for 2025 delivery in Pond Creek, Okla., for $5.50 and $5.45 in Perryton, Texas. The average Pond Creek price is $5.79, and the average Perryton price is $5.85. These below-average forward contract prices are supported by the projected 42% U.S. and 34% world S-T-U ratios. The averages were 41% for the U.S. and 34% for the world. 

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Note that it’s essential to compare the current situation to benchmarks. Without benchmarks, there is no way to determine if the current situation is out of line with past market situations.