PULLMAN – Wheat farmers on the Palouse are delighted by some unexpected rain.
Weather experts had predicted a dry spring and summer, but the opposite has occurred, said Washington State University Extension agent Steve Van Vleet.
“The crops look really good, and the rains we’ve had have been ‘million-dollar rains,’ ” he said. “You can be the (worst) farmer out there and still look good right now with the way things are.”
The good, damp weather last week partially offset frustrating news on wheat prices.
Soft white wheat going to Portland crept into the mid-$6 per-bushel range in May, but fell back to the high $5 range this month.
A higher and more stable price would have been welcome news for area growers.
Soft white wheat was consistently selling in the $8-a-bushel range or higher last August. It dropped to the $4 range in October because of a weak regional harvest, then climbed back into the $5 range, where it has mostly remained since November.
Pacific Northwest Farmers Co-op CEO Sam White said the drop was caused by a variety of factors, but chiefly stronger-than-expected wheat yields internationally. Hedge fund investors also have entered commodities markets, causing prices to be more volatile, he said.
The influence of the hedge funds is particularly troublesome, White said, because they don’t look at the same factors that farmers do when deciding to invest. That makes it tough for farmers who want to lock in a price now to sell at a future date, he said.
“It’s been a trend over the last couple of years, and they look at things that don’t necessarily have anything to do with the fundamentals of farming,” he said.
Colfax farmer Randy Suess agreed.
“It certainly doesn’t make me happy, because they (funds) don’t really own the commodity. It’s all on paper,” Suess said. “It certainly can work both ways and can sometimes help the market, but it also makes it harder to predict.”
Earlier this week, an investigative panel of the Senate Homeland Security and Governmental Affairs Committee concluded that a rise in speculative trading in wheat futures has artificially inflated their prices, making it harder for farmers and grain processors to hedge against risk. The report found that aggressive speculation in the wheat futures market has disrupted normal price patterns.