During the months of October through December 2021, Medford, Okla., 2022 wheat harvest forward contract prices traded in a range between $7 and $8.37. The average price was $7.69. There are indications that wheat prices will continue to be “all over the board” into the 2022 wheat harvest. 

At this writing, wheat may be forward contracted for 2022 harvest delivery in Medford, Oklahoma for $7.70 (-27 KEN22) and in Perryton, Texas for $7.59 (-38 KEN22) (Figure 1). Between June 1, 2009, and August 31, 2021, June, July, and August (harvest) Medford, Oklahoma wheat prices averaged $5.51. The three-month average price range was between $4.13 (2020) and $7.74 (2012). 

Price volatility is partially due to relatively tight wheat stocks. Other market factors creating price uncertainty have been created by Russia and India.  

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Russian wheat policy includes a wheat export tax, which has been set at $94.90 per metric ton or $2.58 per bushel. The export tax has a direct impact on U.S. wheat prices. New tax rates are published every Friday. 

Russia has also implemented an eight-million-bushel quota for wheat exports between Feb. 15 and June 30. The Russian Economic Minister also said that grain export quotas will be set each year from now on. The caveat is that the quota may or may not reduce wheat exports. 

Even with a wheat export tax, an export quota, and 2021 Russian wheat production 362 million bushels less than 2020 production, Russian 2021/22 wheat marketing year exports are projected to be 1.323 billion bushels. The five-year average exports were 1.309 billion bushels per year.  

India is the world’s second-largest wheat producer (4 billion bushels). India’s Agricultural Ministry also announced plans to modify how wheat is handled and marketed reducing massive wheat losses during storage and handling. India’s goal is to become a major wheat exporter. They are the number one exporter of rice. 

During the last three years, India’s wheat exports have increased from 19 million bushels to 193 million bushels.  

India’s Agricultural Ministry also announced plans to modify how wheat is handled and marketed. The new system is designed to reduce grain loss during storage and handling. India’s stated goal is to become a major wheat exporter. Wheat is harvested in India between February and May. 

United States 2021/22 marketing year hard red winter (HRW) wheat ending stocks are projected to be 309 million bushels compared to a five-year average of 524 million bushels. All U.S. wheat ending stocks are projected to be 598 million bushels compared to 845 million bushels last year and a five-year average of 1.05 billion bushels 

World wheat 2021/22 marketing year wheat ending stocks are projected to be 10.22 billion bushels compared to 10.64 billion bushels last year. 

Tight stocks normally result in “weather markets” and prices tend to be more volatile. The three-month weather forecast is for above-average temperatures and average to below- average precipitation in the southern half of the HRW wheat areas. The drought map shows moderate to extreme drought over nearly all the HRW wheat production area.  

At this writing, the market is predicting the Medford, Okla., harvest wheat price to be $7.70 and the Perryton, Texas, harvest wheat price to be $7.59. The October through December 2021, Medford, Okla., harvest forward contract price range indicates that 2022 harvest prices may be between $7.00 and $8.37. With wheat prices “all over the board,” this price range is probably too small.