Spring wheat is making “waves” due to the recent price rally. This variety mainly grows in North Dakota and Montana. The 2016 county production chart highlights these areas. Farmers plant this crop in the late spring and harvest mid-August to mid September. Prices have risen into the planting season, as high as $5.90/bushel on the chart.
Winter wheat is grown, you guessed it, during the winter! (planted in autumn and harvested late spring). It remains in dormancy through the winter, preventing major freeze damage. As you can see, it is grown throughout the U.S., with a maximum in production near Kansas and Oklahoma. July futures tried to rally in late May as freezing temperatures and unusual snow hit parts of Kansas. Prices are now hovering near $4.30/bushel.
Two reasons for spring wheat price difference
So why are prices so much higher for spring wheat? The main reason is the “protein premium” that spring wheat has. The high levels of gluten make the wheat more valuable for food production. Blends of spring wheat with other, lower quality wheat create better grain products.
The other reason is the condition of the crops. Winter wheat broke out of a drought in March, leading to falling prices since then. Now that the heavy rain has slowed, the harvest will occur without delay. But just to the north, a drought is developing. This is not beneficial to to the recently planted crop. Below normal rainfall is expected to continue for at least the next 10 days. The current drought monitor indicates that all of North Dakota is abnormally dry, with some parts in a slight drought.
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