Market Analysis

For information on current and previous baseline projections for wheat, see the Market Outlook page.

Deconstructing Wheat Price Spikes: A Model of Supply and Demand, Financial Speculation, and Commodity Price Comovement

In 2008, wheat futures prices spiked and then crashed, along with prices for other agricultural and nonagricultural commodities. This study uses an econometric model to explain the influence of various factors, including passive speculation by large traders, on wheat prices. Findings show that market-specific shocks related to supply and demand for wheat were the dominant cause of price spikes (April 2014).

Recent Convergence Performance of Futures and Cash Prices for Corn, Soybeans, and Wheat

From 2005 to 2011, wheat, corn, and soybean futures contracts were affected by growing discrepancies between expiring futures prices and cash prices—a problem known as nonconvergence. In response, the futures exchanges modified their contracts to better reflect market conditions. Those modifications appear to have improved convergence in these markets since 2011 (December 2013).

U.S. Wheat Production Practices, Costs, and Yields: Variations Across Regions

The study explores the variation in wheat yields and production costs across U.S. regions, based on data from the 2009 Agricultural Resource Management Survey (August 2013).

Rising Grain Exports by the Former Soviet Union Region

During the 2000s, the three major grain-producing countries of the former Soviet Union—Kazakhstan, Russia, and Ukraine (KRU)—became a large grain-exporting region. This report examines why this has happened and also provides the outlook for the region’s production and exports over the next 10 years (February 2013).

"Former Soviet Union Region To Play Larger Role in Meeting World Wheat Needs"

The next decade is likely to see a major shift in global wheat production and trade. USDA projects that wheat exports by Russia, Ukraine, and Kazakhstan will increase by 50 percent by 2019, and the region could lead the world in wheat exports by the end of the period (Amber Waves, June 2010).

Issues and Prospects in Corn, Soybeans, and Wheat Futures Markets

The past 5 years have seen large increases in trading of corn, soybean, and wheat futures contracts by nontraditional traders, a trend that coincided with historic price increases for these commodities. These events have raised questions about whether changes in the composition of participating traders have contributed to movements in commodity prices beyond the effects of market fundamentals. Evidence suggests the link between futures and cash prices for some commodity markets may have weakened (i.e., poor convergence), making it more difficult for traditional traders to use futures markets to manage risk (August 2009).

Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices

World market prices for major food commodities such as grains and vegetable oils have risen sharply to historic highs of more than 60 percent above levels just 2 years ago. Many factors have contributed to the runup in food commodity prices (July 2008).

Issues and Prospects in Corn, Soybeans, and Wheat Futures Markets

This report discusses the role and objective of new futures traders compared with those of traditional futures traders. This report seeks to determine what changes have occurred in the futures market as a result of new entrants and to discover whether the composition of traders in futures markets has contributed to the weakening of the link between futures and cash prices (August 2009).

Consequences of Higher Input Costs and Wheat Prices for U.S. Wheat Producers

This report uses a cumulative distribution of forecasted production costs for wheat farms to show that current high (but falling) wheat prices will allow a greater share of producers to cover their production costs in 2008 (90 percent) than in 2004 (82 percent), despite higher input costs in 2008. However, if farm-gate prices for wheat continue to fall into 2009, the U.S. wheat sector may see further attrition of planted area. For full report, see link below:

"Agricultural Commodity Price Spikes in the 1970s and 1990s: Valuable Lessons for Today"

This report examines the recent runup in commodity prices in light of similar occurrences in 1971-74 and 1994-96. Although similar to those earlier price runups, rising demand for grains and oilseeds for biofuels adds a new dimension of complexity (Amber Waves, March 2008).

"Fluctuating Food Commodity Prices: A Complex Issue With No Easy Answers"

This report explores the many factors that contributed to the rapid escalation of food commodity prices through mid-2008 (Amber Waves, November 2008). For the full report, see Global Agricultural Supply and Demand: Factors Contributing to the Recent Increase in Food Commodity Prices (July 2008), link below:

The U.S. Grain Consumption Landscape: Who Eats Grain, in What Form, Where, and How Much?

This report compares Americans consumption of grains with the recommendations in the Government's 2005 Dietary Guidelines, using data from USDA's Continuing Survey of Food Intakes by Individuals, 1994-96 and 1998. Results suggest that consumers who perceive grain consumption as important and read food labels during shopping tend to eat more whole grains than other people (November 2007).

The Changing Face of the U.S. Grain System

This publication discusses the evolving nature of U.S. grain handling and marketing, which is increasingly marked by product differentiation and market segmentation. More specialty crops now require either some form of segregation or full-scale identity preservation to keep them separate from conventional commodities. Market segmentation within the grain system is driven by the need to preserve market value or ensure product purity (February 2007).

Hard White Wheat At A Crossroads

This report provides background on the forces that led to the expansion of hard white wheat (HWW) production, its milling and baking qualities that make it particularly suited for certain products such as tortillas and Oriental noodles, the adaptation of the marketing system to preserve its identity, and the prospects for HWW's production expansion. Continuing expansion of HWW production would depend on the development of new, higher yielding varieties that are more tolerant to sprout damage and the continuation of the Government incentive program (December 2004).

Characteristics and Production Costs of U.S. Wheat Farms

This publication reports that the average cost of producing a bushel of wheat in 1998 was $3.97, ranging from about $1.25 to more than $6 per bushel. Regional differences in production practices and growing conditions were major influences on production costs and yields among wheat producers (July 2002).

How Wheat Production Costs Vary

This report draws on the most recent Agricultural Resource Management Survey (ARMS) to show that the cost of producing wheat varied widely among growers, primarily because of differences in production practices and yields (March 2002).

Price Determination for Corn and Wheat: The Role of Market Factors and Government Programs

This publication finds a number of factors affect U.S. farm-level prices for corn and wheat, indicated by models based on supply and demand conditions, as well as government policies (August 1999).

Providing Timely Farm Price Forecasts: Using Wheat Futures Prices to Forecast U.S. Wheat Prices at the Farm Level

This includes technical analyses of forecasting wheat prices (June 1999).

Commodity Policy

The Economic Impact of Karnal Bunt Phytosanitary Wheat Export Certificates

This report gives the results of ERS research on the economic consequences of ending the USDA Karnal bunt (KB) certification program for U.S. exports to countries that ban import of wheat from countries known to have the disease. USDA currently issues certificates that U.S. wheat shipments are from areas where KB is not known to occur. For the full report, see link below:

Valuing Counter-Cyclical Payments: Implications for Producer Risk Management and Program Administration

This report illustrates an improved method for estimating counter-cyclical payment (CCP) rates by accounting for the variability in market price forecast errors. Forecasters and producers can use the model to calculate the probability of having to repay advanced CCPs (February 2007).

Wheat Backgrounder

This research addresses key domestic and international market and policy developments that have affected the U.S. wheat sector in recent years. The report contains information on supply and demand developments, domestic and trade policy, a wheat farm profile and financial characteristics, and addresses issues and opportunities to be considered in domestic agricultural policy deliberations (December 2005).

Wheat and Barley Policies in Japan

This report provides a detailed description and analysis of policies used by Japan to support its wheat and barley producers. Japan uses tax revenues and a markup on prices of wheat and barley imported within a quota to provide large direct payments to producers. Consumers and taxpayers ultimately pay for this support (November 2004).

The 2002 Farm Act: Provisions and Implications for Commodity Markets

This report provides an initial assessment of the legislation's effects on agricultural production, commodity markets, and net farm income over the next 10 years. Results indicate that commodity market impacts are fairly small. Net farm income is projected higher than under a continuation of the 1996 Farm Act, largely reflecting an increase in government payments (November 2002).

Economic Analysis of Ending the Issuance of Karnal Bunt Phytosanitary Wheat Export Certificates

This publication indicates that ending this certification program would jeopardize U.S. exports to some countries. The loss of export markets for U.S. wheat producers would be only partly offset by increased domestic feeding of lower priced wheat. Reduced wheat production and lower wheat prices would reduce the total value of the wheat produced in the country, as well as net income in U.S. agriculture (March 2002).

Wheat: Background and Issues for Farm Legislation

This report addresses considerations in the 2002 farm bill debate, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets (August 2002).

Analysis of the U.S. Commodity Loan Program with Marketing Loan Provisions

This report assesses the impacts of marketing loans on production, use, and prices, and illustrates that the program has enabled farmers to attain, on average, per-unit revenues that exceed commodity loan rates (May 2001).

Wheat and the Conservation Reserve Program: Past, Present, and Future

This contains background on the impact of USDA's land retirement program on wheat production, particularly in the Plains (March 1997).


Price Volatility in Afghanistan's Wheat Market

This report analyzes the role imports have played in stabilizing Afghan wheat prices by mitigating the effects of shortfalls in domestic production and assesses whether Afghanistan's internal wheat markets are sufficiently connected with international markets to cope with volatility in domestic output. For full report, see link below:

Indian Wheat and Rice Sector Policies and the Implications of Reform

This report suggests that future developments in India's food grain sector will be shaped by how policies adapt to the sector's new economic environment. Some changes, such as reducing price supports and the scope of government food grain operations, would likely cut government costs, benefit consumers, allow a larger private-sector role in the domestic market, and increase reliance on trade (May 2007).

Black Sea Grain Exports: Will They Be Moderate or Large?

This report examines the prospects for grain exports (mostly wheat) by the transition economies of Central and Eastern Europe and the Newly Independent States that export through the Black Sea, the largest being Russia and Ukraine. If productivity growth in the region is high, annual grain exports by Black Sea countries could rise to 30-40 million metric tons (October 2004).

China's Wheat Economy: Current Trends and Prospects for Imports

This report provides an overview of wheat production and consumption trends in China, including factors that contributed to slumping imports in recent years. It projects that China will regain its status as a net wheat importer, with imports rising sharply in the next year or two (2005-06), but falling back to modest levels after that time (May 2004).

Mycotoxin Hazards and Regulations: Impacts on Food and Animal Feed Crop Trade

This publication addresses the difficulty of balancing food safety concerns and efforts to limit the economic costs of trade disruptions. This chapter reviews food safety risks posed by mycotoxin-contaminated grains and demonstrates that a lack of international consensus on mycotoxin standards has important trade implications (November 2003).

International Wheat Breeding and Future Wheat Productivity in Developing Countries

This explains the slowing of wheat yield growth in developing countries and examines future challenges for wheat breeding in these countries (March 2002).

The New Agricultural Trade Negotiations: Background and Issues for the U.S. Wheat Sector

This report focuses on further reducing tariffs and improving market access, eliminating and prohibiting the use of export subsidies, and placing further limitations on trade-distorting domestic support programs (March 2000).

Related links

U.S. Department of Agriculture

National Agricultural Statistics Service provides data on yields, acreage, production, prices by State and nationally, as well as current crop progress and commodity specific reports.

World Agricultural Outlook Board provides data on supply and use of wheat and other principal crops for the United States and other countries.

Agricultural Marketing Service provides current cash grain prices and market news, as well as information on grain transportation and exporting, and standardization and grading.

Foreign Agricultural Service provides data on current U.S. wheat export sales, data on supply and demand (including imports and exports) for major wheat trading countries, and current world market and trade reports.

Risk Management Agency provides crop insurance information.

Farm Service Agency offers extensive information on farm and conservation programs and on specific commodity programs and markets, as well as program-related USDA announcements.

National Agricultural Library, National Agricultural Library Digital Collections  offers online browsing of historical ERS Agricultural Economic Reports and Agriculture Information Bulletins.

U.S. Department of Commerce

U.S. Census Bureau provides data on wheat ground and flour production, and the Economic Census.