Two sentences in a wheat article published in Barron’s (Shawn Hackett, Hackett Money Flow Report) recently read: “Get ready for wheat prices to reach for the sky. In fact, depending on the weather, they could more than double from current levels.” The key words are, “…depending on the weather.”

If U.S. winter wheat production is significantly less than expected (say, 1.3 billion bushels), wheat prices could increase 25 percent or more ($1.25+). Additional production losses in major exporting countries could result in another $1.00 or more increase. However, the odds of an increase from $5.75 to $11.50 are “slim to none.”

At this writing, the KC July wheat contract price is $5.86. Price resistance occurred around $5.80 and support was at about $5.40. During the last two weeks, the KC July contract price tested $5.80 three times. If the July contract price can close above $5.80 for two consecutive days, the next price target may be $6.20.

For the latest on southwest agriculture, please check out Southwest Farm Press Daily and receive the latest news right to your inbox.

Drought and/or freeze damaged wheat has been reported in every hard red winter (HRW) wheat producing state except Montana. USDA’s crop condition reports indicate that the HRW wheat condition is significantly better than last year. Colorado’s wheat is rated 58 percent good to excellent compared to 12 percent last year. Kansas’ wheat is rated 39 percent good to excellent compared to 32 percent last year. Oklahoma’s wheat is rated 44 percent compared to 17 percent last year, and Texas’ wheat is rated 55 percent good to excellent compared to 4 percent last year.

A good possibility is that the HRW wheat crop is not as sound as the USDA’s conditions report indicates. Even if the wheat is in relatively good condition now, most of the HRW wheat area is located in areas with drought conditions. Timely rains will be required to get an average crop in the bin.

Better growing conditions will be partially offset by less planted acreage. All wheat planted acres (55.4 million acres) are down 3 percent from last year. Winter wheat planted acres are 4 percent lower at 40.8 million acres, and hard red winter wheat acres are 3 percent lower than last year at 29.6 million acres.

Hard red winter wheat production was 738 million bushels last year compared to a five-year average of 854 million bushels. Given current crop conditions and planted acres, 2015 HRW wheat production is expected to be average or better.

Flour millers in India (whose 2015 wheat harvest has started) have reportedly purchased almost 3 million bushels of Australian wheat. India’s purchase is reportedly due to reduced production and quality caused by excess rain. The report (Reuters) indicates that the top protein producing areas were affected the worst.

During the last 10 years, India’s wheat production has increased from 2.42 billion bushels to 3.5 billion. India’s wheat ending stocks have increased from 74 million to 606 million bushels. India went from a major importer to a net exporter of wheat. Relatively low wheat quality may result in India importing relatively high milling quality wheat to blend with their lower quality wheat.

About 60 days remain until the Oklahoma and Texas wheat harvests are in full swing. U.S. wheat stocks, especially HRW wheat stocks, are sufficiently tight so that below average production would result in higher prices.

But world wheat production would need to be well below 25 billion bushels to cause wheat prices to double. Right now, several market analytical firms have 2015/16 world wheat production at 26.3 billion bushels.

Wheat prices may be (and probably will be) higher than current prices. But $10-plus wheat is just not in the cards.