Pearson: Welcome to the Market Plus page here at our Market to Market Web site. I'm Mark Pearson. With me this week Doug Hjort, one of our senior analysts. Doug, we got to give it some short shrift on the show because we've got so many things to cover but I want to talk about this wheat market. And this is not unusual but it's fairly dramatic this year, the divergence between the demand for what we refer to on the show. I should explain this. We talk about Chicago wheat which is the soft red variety which is typically harvested in July. It is planted about now or a little bit later throughout really the corn and the bean belt. It is typically the lowest quality in terms of protein and very light demand but it's a good red wheat and so forth. It gets sold out there. But the wheats that are usually the most interesting to watch are the ones that are produced in Kansas, the west, North Dakota, South Dakota and those are the hard red spring and the Durham wheats. Talk about what is happening out there. We talk about the Chicago soft on the show and again that is kind of fallen apart but there may be some sales opportunities for the hard wheat varieties.
Hjort: Yeah, there is in my opinion because you're looking at a pretty good crop out there although as you go through North Dakota and into eastern Montana, that is where the majority of the spring wheat is raised, yields are all over the place. In my hometown east Sheridan County yields are running from somewhere between twenty and forty bushel per acre for example and 20-30 miles apart. So, it's just the shower activity again. That is one thing about it. But production generally speaking was pretty good again for Durham and for the hard red spring.
When you look at the demand factors it seems the foreign buyers had been coming to the United States and buying the high protein, high quality hard red spring, hard red winter wheats and so on. And that is going to be a driving force, continuing to be a driving force I think in that market. However, there is a limit to where they're going to go with those. Remember Australia, they started out real poor with weather but they've had better weather right along and now just late this week the Australians raised their production. they said maybe 23 million tons, started out below 20, you know, so it's in a recovery. So, that wheat is going to hit the market in not too long a time.
So, you have to watch this whole picture pretty carefully but there is good strong demand for the top quality wheat. If you've got any of that top quality wheat, high protein stuff don't just settle for the cash price that is written on the elevator wall. Start negotiating with people because there is a premium to be paid for that stuff.
On the Durham it's an interesting thing there. The U.S. Durham crop is a good one this year, large production. Canada has a large production, we don't know yet about the quality because they're forecasting showers and rain and stuff like that. But that is a thing we have to deal with every year up there in the northern extremes. But European, the European Union Durham production down 35% this year. That is serious, that is one of the biggest changes in production that I can ever remember. They are going to be looking for top quality Durham. So, there again if you've got top quality Durham prices are just rock bottom right now, three dollars. $3.05, $3.20 maybe $3.40 in central North Dakota. But those prices are going to be coming up and how much I don't know. And it may take a while. It may be towards spring before those prices really do recover. But I think they will recover just because of the world shortage.
Pearson: Okay, so the Durham producer out there should be keeping some powder dry here.
Hjort: That's absolutely right, just find the storage and hang onto it. I think you're going to be well rewarded this year.
Pearson: Alright, some good news for our friends in the wheat production business. Our guest this week is Doug Hjort. I'm Mark Pearson. From all of us here at Market to Market for our Market Plus Web site, thanks for joining us. Have a great week.