Wheat Harvest Already Breaks Record

Even though South Africa, Australia and Argentina haven't harvested their wheat yet, current wheat harvests around the world have already broken a global record.

Over the last three years worldwide consumption has been 22.9, 22.7, and 22.7 billion bushels. So far this year 23.3 billion bushels have been harvested.

If consumption is similar to the past years, we'll see ending stocks increase by about 900 million bushels.

Projections for wheat use in 2008-2009 are at close to 24.1 billion bushels. After South Africa, Australia and Argentina harvest their wheat, supply is expected to come in at around 25 billion bushels.

With farmers belatedly planting more wheat because of past performance, it has caused this surge of supply. Now with prices falling because of so much product, wheat production costs are higher than what wheat prices can bring.

Many wheat farmers need to understand that when a great year just ends, it probably is a signal that the next year will end up just like this one, as the obvious knee jerk reaction of planting more acres will happen, which will drive down prices.

Those investing in wheat also need to take this into account.