Wheat prices rocketed Monday, with some varieties reaching the highest level since February 1981, as farmers held back grain in hope of even higher prices.
“Nobody wants to sell,” said Joel Karlin, vice president of commodities at Kemper Securities Inc. in Chicago.
Kansas farmers, who have been harvesting wheat under sunny skies, are reluctant to sell the grain, convinced they can get a better price in coming weeks.
“At some point producers have to turn out some of this wheat,” said Fred Bursey Jr., vice president at Morrison Milling in Denton, Texas. “If they don’t, prices are going to continue to go up.”
Soft red winter wheat for July delivery at the Chicago Board of Trade climbed 19.50 cents to $4.6050 a bushel, the highest for the contract closest to expiration in more than 14 years.
Futures prices for white wheat - the predominant variety grown in Inland Northwest - rose 12 cents a bushel to $4.99 for September delivery at the Minneapolis Grain Exchange. Although that is more than the price for red wheat, it is not the highest level since 1981.
Cash prices paid by Portland traders for soft white wheat were unmoved at $4.95 a bushel. Portland cash sales briefly exceeded $5 a bushel on June 30, but have not been sustained at that level since a killer winter storm hit the Inland Northwest in February 1989.
Wheat prices have risen about 15 percent during the past two months on concern that world wheat stockpiles will drop next year because of poor harvests in the U.S., Canada and the former Soviet Union.
The U.S. Department of Agriculture forecasts world wheat stockpiles next year will plunge 6.1 percent.