Two plus years of exceedingly high protein premiums appear to be coming to an end in the hard red spring wheat market. In the past month, a $2 discount for 13% vs. 14% protein is now closer to 50 cents per bushel. In the past week, a $2 premium for 15% vs. 14% protein is now less than 50 cents per bushel. In mid-July, as it has been for much of the past year, 15% protein was worth $4 per bushel more than 13% protein. That spread is now less than a dollar.
Four dollars for 2% more protein content – I used to buy a bushel of 15% protein for less than $4 per bushel!
Protein premiums adjust quickly to new crop prospects. Word in the wheat trade is that early harvested wheat is higher in protein (15% is common), lower in test weight (more 58 lb. vs. the incredible 62-64 lb. wheat of the last two years) and lower in yield. High temperatures in early July definitely had an impact on a portion of the spring wheat crop in the Dakotas.
I doubt that the entire crop will be high protein. The planting season was very l-o-n-g this year, hence we have a crop with more variability in the development stage. Heat makes protein at particular stages of development, and the entire crop was not at the same stage in early July.
The hard red winter wheat crop also has better protein this year. Don’t be surprised if the smaller protein premiums get even smaller in the weeks ahead.