Prices for organic food-grade hard red spring wheat were quoted at $16.59 a bushel in the May-June period, down $3.33 from March-April but up 62¢ from $15.97 a bushel a year ago amid steady trading, according to Mercaris data.
“Organic hard red spring wheat trade remained steady into June, with prices generally down from their peak at the end of the first quarter,” said Ryan Koory, Mercaris senior economist. “With spring wheat planting completed, weather is the factor to watch over the remainder of the growing season, as severe drought conditions developed last year significantly reducing spring wheat yields. Thus far, U.S. Drought Monitor data provided by the University of Nebraska-Lincoln indicates that soil moisture has remained sufficient this year across the Northern Plains states of Montana, North Dakota and South Dakota where the majority of U.S. organic spring wheat acres are located.
“Mercaris is of the opinion that spring wheat conditions are worth keeping an eye on this summer, as the combination of recovering yields and expanding acreage could result in a significant increase in spring wheat supplies for the 2018-19 marketing year.”
Food-grade organic hard red winter wheat averaged $10.70 a bushel in May-June, down $2.78 from the March-April period but up $2.11 from $8.59 a bushel a year ago.
“Organic hard red winter wheat prices continued to decline in June following harvesting progress,” Koory said. “The Mercaris recorded average delivered hard red winter wheat price averaged $10.70 per bushel over the May-June time period, down $2.78 per bushel from the March-April time period. With harvest underway, the extent to which yields have been impacted this year by the severe drought conditions across the southern portion of the United States will begin to be fully understood.
“Mercaris looks for organic winter wheat production to be mostly spared from the majority of the drought’s impact, as organic wheat is predominantly grown further to the north. Once harvest is complete and state-level yield data becomes available, Mercaris will assess the 2018-19 organic winter wheat crop and determine just how much supply the market will have to ration over the next year.”
Food-grade organic soft red winter wheat had sufficient trading volume to report prices this period. Soft red winter wheat averaged $10.85 per bushel in May-June, up 83¢ from the March-April period with year-ago prices not available.
“Recently Mercaris began collecting sufficient data to release pricing data for U.S. organic soft red winter wheat,” Koory said. “Through the second quarter, soft red winter wheat has held mostly steady in the $10 to $11 per bushel range, averaging $10.85 over the May-June time period. With continued expansion in our food grade organic wheat pricing, Mercaris will continue to add insight and market commentary pertaining to soft red winter wheat as well as other wheat varieties as the data become available.”
Prices of food-grade organic durum jumped to $19.54 per bushel in May-June, up $2.18 from March-April with year-ago quotes not available.
|Ryan Koory, Mercaris senior economist|
“Organic durum wheat purchasing continued to increase in June, pulling the May-June average delivered price up to $19.54 per bushel,” Koory said. “June saw the volume of durum wheat contacted reach its highest level thus far in 2018.”
Organic corn prices eased in May-June but held above year-ago levels.
“Organic corn trade began to run slack again in June, with the Mercaris recorded delivered price averaging $10.35 per bushel over the May-June time period,” Koory said. “Despite the slowing pace of trades, prices remained above the $10-per-bu range for the third consecutive month in June. At this point, contacts for fall new crop delivery are mostly settled with prices for fourth-quarter 2018 delivery averaging even with current prices at $10.35 per bushel.
“So far, weather has been a generally positive factor for the U.S. corn crop. From crop condition data provided by the U.S. Department of Agriculture, Mercaris estimates that 72% of the organic corn crop across the top 10 organic corn producing states was rated in good-to-excellent condition the week of July 9, even with last year. Drought conditions in Texas have begun to raise concerns about the state’s organic corn crop. In 2017, Mercaris estimated that Texas harvested 26,140 acres of organic corn, or 7% of total U.S. organic corn acres. Food-grade organic corn is largely protected, however, from the worsening conditions in Texas as the majority of the state’s organic corn production is used to feed its growing organic dairy industry.”
“Organic soybeans approached $22 per bushel at the end of the second quarter, averaging $21.87 per bushel over the May-June time period following a slight uptick in contracting activity over June,” Koory said. “Prices for new-crop fourth-quarter 2018 delivery are currently running at a notable discount at slightly below $20 per bushel. However, purchasers may be preparing for tighter post-harvest supplies as contract prices for first-quarter and second-quarter 2019 delivery are currently running well above $22.50 per bushel.
“Overall, the quality of the organic soybean crop appears to be in good condition. From crop condition data provided by the USDA, Mercaris estimates that 71% of the organic soybean crop across the top 10 organic soybean producing states was rated as in good to excellent condition the week of July 9, up four percentage points from last year. Missouri has seen its soybean crop condition deteriorate this year as heat and dryness persisted over the majority of June. However, a decent amount of rain did fall in late June and early July. Subsequently, Missouri’s soybean crop quality has improved from its low point in mid-June of 44% rated good to excellent. Mercaris estimates that Missouri harvested 17,000 acres of organic soybeans in 2017, or about 8% of total U.S. harvested organic soybean acres.”
Mercaris is a comprehensive source of market data and online trading for feed-grade and food-grade organic and non-GMO commodities based in Silver Spring, Maryland, U.S. For more information visit www.mercaris.com.