At this writing, wheat may be forward contracted for 2023 harvest delivery in Medford, Okla., for $7.50. The forward contract price in Perryton, Texas, is $7.55 (5 cents higher), and the price is $7.25 (25 cents lower) in southwestern Oklahoma. The odds are that the 2023 wheat harvest price will be between $6 and $9.  

$6 is only $1.50 less than the current harvest forward contract price, and $9 is only $1.50 more than the current price. We all know wheat prices can move $1.50 up or down relatively fast. In less than three weeks (Feb. 13 to March 9), Medford, Okla., wheat harvest prices declined $1.35. 

There are two recent examples of relatively large price movements. Between Nov. 1, 2022, and Dec. 6, 2022, wheat prices fell from $9.50 to $7.90 (-$1.60). Between Aug. 18, 2022, and Sept. 22, 2022, wheat prices increased from $7.73 to $9.40 (+$1.67). 

Currently, wheat prices are relatively high because world and U.S. wheat stocks are tight. The U.S. 2022/23 wheat stocks-to-use ratio is projected to be 30% compared to 56% for the 2017/18 wheat marketing year. The world wheat stocks-to-use ratio is projected to be 33.7% compared to 39.9% for the 2019/20 wheat marketing year. 

For the 2009/10 wheat marketing year, the U.S. stocks-to-use ratio was 48% and the average annual price was $4.87. 

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Between the 2010/11 and the 2014/15 wheat marketing years, Medford, Okla., wheat prices traded in the $6 and $9 range (Figure 1). The average stocks-to-use ratio for these four marketing years was 32%. The stock-to-use ranges were between 24% and 37%. 

Between the 2014/15 and the 2020/21 wheat marketing years, Medford, Okla., wheat prices traded mostly in the $3 to $6 range. The average U.S. wheat stocks-to-use ratio was 52%. The stocks-to-use ratios were between 49% and 55%. 

Wheat prices began trading in the $6 to $9 range in January 2021. For the 2021/22 wheat marketing year, the U.S. wheat stocks-to-use ratio was 37%. The 2022/23 stocks-to-use ratio is projected to be 30%, and the U.S. average annual price is projected to be $9. 

At the February USDA Outlook Forum, 2023/24 U.S. wheat marketing year wheat production was projected to be 1.89 billion bushels. Wheat use was projected to be 1.97 billion bushels, and U.S. wheat ending stocks were projected to be 929 million bushels. 

The 2023/24 wheat marketing year stocks-to-use ratio was projected to be 31% (0.929 ÷ 1.97). The average annual U.S. wheat price was projected to be $8.50.  

Factors that may change the USDA February predictions mostly come from Russia wheat exports. In 2022, Russia produced a 3.4-billion-bushel wheat crop compared to the previous record of 3.1 billion bushels and a five-year average of 2.9 billion bushels. 

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For 2023, Russia is projected to produce 2.9 billion bushels of wheat. Russia will start the 2023/24 marketing year with 529 million bushels compared to a five-year average of 364 million bushels. Russia’s above average wheat supply may result in higher-than-expected wheat exports.   

U.S. wheat exports may be less than projected. The result would be lower U.S. wheat use, higher U.S. ending stocks, a higher U.S. wheat stocks-to-use ratio and lower prices. 

Oklahoma and Texas wheat prices are expected to remain in the $6 to $9 range during most of the 2023/24 wheat marketing year.