KANSAS CITY, MISSOURI, U.S. — Prices for organic food-grade wheat and durum during the March-April period were mixed but mostly higher from the prior two two-month periods, and all were above year-ago levels, according to Mercaris, the organic and non-GMO trading platform and market information company.
Prices for organic food-grade soybeans also were high, while corn trading was sluggish in March-April with volumes too low to quote, Mercaris said. Prices for soft red winter wheat also were not quoted in the latest period.
Prices for food-grade organic hard red spring wheat averaged $20.62 per bushel in the March-April period, with no comparable price in January-February but up $6.91 per bushel from November-December and up 70¢ per bushel from the same period last year.
“Organic hard red spring wheat contracting is holding also steady, with prices holding a solid premium over last year,” said Ryan Koory, senior economist at Mercaris. “Spring wheat planting is also slightly delayed this year, but by a much smaller amount than either corn or soybeans. The majority of organic spring wheat acres are planted further west, in states such as Montana and North Dakota. As a result, they have been spared the brunt of the planting delays that are plaguing many farmers in the Midwest and further to the east.”
Hard red winter wheat averaged $13.59 per bushel in March-April, down 62¢ per bu from January-February but up 96¢ from November-December and up 12¢ per bushel from March-April 2018.
“Organic hard red winter wheat prices gave back some of their late first-quarter gains, averaging $13.59 per bushel for the two-month period ending April 30,” Koory said. “Concerns about the quality of this year’s winter wheat crop are becoming a reality for many producers. But that is not to say that the U.S. organic winter wheat crop appears to be in poor shape overall. In contrast, Mercaris estimates the share of the U.S. organic winter wheat crop rated in good-to-excellent condition reached 66% in the week ending May 5, up from 49% last year. However, the picture is geographically mixed. While growers along the High Plains and northwestern portion of the United States appear to have wheat crops in much better shape than last year, growers along the Great Lakes and throughout the Midwest are facing what appears to be one of the lowest quality winter wheat crops in several years. This means we may see a food-grade organic winter wheat crop that is in relatively good condition but located further to the west. Meanwhile, growers in the central United States might be turning to livestock operations to offload some very low-quality wheat.”
Food-grade organic durum averaged $19.09 per bushel in March-April, up $2.89 per bushel from January-February, up $2.60 per bushel from November-December and up 70¢ per bushel from a year earlier.
“Organic durum wheat contracting is holding steady in the second quarter, with prices holding near $19 per bushel,” Koory said. “Spring has seen durum wheat prices pull higher, holding a premium over last year’s level.”
Organic food-grade soybean prices in March-April averaged $22.90 per bushel, up $2.51 per bushel from January-February, up $1 per bushel from November-December and up $1.33 per bushel from a year earlier.
“Organic food grade soybean prices began to push above last year’s level mid-way through quarter one and appear to be carrying this momentum through the spring,” Koory said. “A lot of news has been released recently that suggests U.S. organic soybean markets may be headed for volatility over the coming summer months. The extended cold, wet weather conditions are a widely discussed factor. And this is a reality that organic producers are likely to deal with as well.
“From U.S. Department of Agriculture planting progress data, Mercaris estimates U.S. organic soybean planting was about 8% complete in the week ending May 12, well behind the five-year average of 21% complete. But in reality, 8% complete is only about a week behind the average. If dryer conditions take hold, this delay could quickly turn around. However, with more wet weather in the forecast for the Midwest, there is a real risk that planting will become increasingly delayed.
“Another factor that could be disruptive for U.S. organic soybean markets is the recent USDA National Organic Program (NOP) announcement suspending all organic certifications previously covered by the Control Union Certifications Turkey office (CUC — Turkey). With this announcement all shipments of organic commodities from the CUC — Turkey will be prohibited from entering the United States, effectively ending the importation of organic commodities from the Black Sea region. Although this announcement is significant in that it signals a crackdown by the NOP on potentially fraudulent foreign organic suppliers, it may not in reality lead to a substantial reduction in U.S. organic commodity imports as the flow of imports from Black Sea region countries has significantly declined over the past two years.
“U.S. organic soybean imports were already on pace to decline year-over-year from 2018-19 as U.S. purchasers are switching from importing whole organic soybeans, and increasingly importing organic soybean meal from India instead.
“Despite the relative minor impact on overall supplies from the loss of supplies from the Black Sea region, any news of this nature tends to disrupt the market over the short term. Looking more long term, U.S. production may shape up to be the biggest concern as yields and acres contend with weather this spring.”
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.