Posted by: usset001 | August 31, 2011

North Dakota Hard Red Spring Wheat Protein Content and MGEX Protein Premiums

Here is my chart of the day, showing a simple relationship between the average protein content in the North Dakota hard red spring wheat crop versus the crop year average protein premiums for 15% protein over 14% protein HRS wheat. The relationship is strong: less protein = higher protein premiums and vice-versa. Look at the extremes. In the upper left, the point shows an average protein premium of 163 cents per bushel in the 2010 crop year (2009 & 2010 average protein of 13.5%), while the lower right shows an average protein premium of just 1 cent during the 1989 crop year (1988 & 1989 average protein content of 15.9%).

The protein data comes from the regional spring wheat quality reports and the premium data comes from the Minneapolis Grain Exchange, as reported by USDA Grain Market News.

Note that the protein content is an average of two years. Given that a portion of each crop is carried over into the next year, this is a more accurate description of the availability of protein to the market. A more rigorous analysis of protein premiums would also include data on the average protein content in the HRW wheat crop.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Categories

%d bloggers like this: