A Look At Harvest 2017

The song of harvest has begun. The base rhythm of big diesel engines, the occasional shrill warble of fire trucks and the soothing rush of cab air conditioners, all blending into a roar of wheat, peas, lentils, garbanzos and more flowing over the top into bins, barges and vessels. The song is always new, but ancient, hot, dusty. It is anxious, hopeful and sometimes joyful in the periods between frustration with broken machinery and the occasional confused harvest crew member. The satisfaction of completion of a yearlong cycle of hard work feeds the soul and fills wallets, large and small, from landowners and leaseholders to truck drivers and even the least grease-monkey. This is when the miracle of sun, rain, toil, soil and seed comes to pass as the river of gold reaches its crest.

As U.S. national winter wheat harvest is more than 84% done, Pacific Northwest combines are just beginning to roll. Washington showed 18%, Oregon 31% and Idaho at 11% completed in the most recent USDA progress reports. Wheat prices were still in a weak up-trend last week, although there has been a very rapid break from First Week July near $6.00/bushel down to $5.00 or lower this week for Chicago December contracts. The year-to-date lowest point showed on the price charts back in the last week of April, about 50 cents below this week’s trading levels. For December futures, a couple of days of failure to hold above $5.00 would be a warning shot. Portland white was quoted at about $5.35 Tuesday morning.

At this point in the season, official reports from government statisticians tend to begin to shrink crop projections, especially following the recent strong spring season of growth with plenty of moisture, but there is no global shortage of wheat supplies expected this fall. No major wheat-producing region in the world is in any real trouble, suggesting a relatively weak band of price movement ahead. The current price level is the highest in a year, so the downside price risk is considerable.

For most folks, the day-to-day wanderings of the price of wheat do not raise much anxiety. The trucks roll by on the highway and the sight of a combine rolling across a steep hillside is a photo op for travelers. But there is a grand sweep taking place that never fails to stir the heart of anyone who has ever been close to wheat farming. Wheat is human food, healthy for most of us, excessive carb consumption and gluten notwithstanding, especially the wheat grown in the dryland parts of the country.

Bread is life, and while most of the wheat grown in the Pacific Northwest is turned into noodles and flatbreads in the Pacific Rim countries on the far side of the Pacific Ocean, the principal remains; wheat farmers are the stewards of a basic daily necessity. In a world full of woe, they keep on getting up at dawn to bring in the crop, just as they have for thousands of years. Thanks, wheat families! Let the song be sung!

The data and opinions in this article are for general bemusement only and are not an offer or solicitation to trade, purchase or sell any futures contracts. Anyone who attempts to use this article as a trading guide has failed to understand its appropriate use. Information and opinions herein are believed to be reliable, but there is no way to guarantee accuracy or completeness. Although it may appear otherwise, there is a significant risk of loss associated with trading futures and options or holding cash wheat without price protection in storage.

Gary Hofer is a crop market analyst in Waitsburg, and longtime contributor to The Times.