Learn About Wheat Planting and Harvest Seasons
Wheat crops grow around the world and have unique production cycles when it comes to planting and harvest seasons. Grain prices tend to fluctuate most during the growing season, as supply expectations can shift significantly due to planted acreage, weather, and growing conditions.
In the United States and China, there are two seasonal wheat crops - spring wheat and winter wheat. Winter wheat accounts for nearly three-fourths of total U.S. production. North Dakota accounts for more than half of all U.S. spring wheat. The largest producing states for winter wheat are Kansas, Texas, and Washington.
The seasonal timeframe for planting and harvest of wheat crops around the world in the main producing nations is listed below:
- United States (8 percent of world production)
Planting: Planting of winter wheat occurs from mid-August through October.
Harvest: Harvesting of winter wheat occurs from mid-May to mid-July.
Planting: Planting of spring wheat occurs from April through May.
Harvest: Harvesting of spring wheat occurs from mid-August to mid-September.
- China (18 percent of world production)
Planting: Planting of winter wheat occurs from mid-September through October.Harvest: Harvesting of winter wheat occurs from mid-May through June.
Planting: Planting of spring wheat occurs from mid-March through April.
Harvest: Harvesting of spring wheat occurs from mid-July to mid-August.
Wheat: The Most Political Commodity in the World
Wheat is perhaps the most political commodity in the world because it is the main ingredient in the most basic food, bread. While the United States is the world’s largest producer and exporter of corn and soybeans, wheat production comes from all corners of the earth. While China and the U.S. are major producers the European Union, India, Russia, Canada, Pakistan, Australia, Ukraine, and Kazakhstan are also important producers of the grain consumed all over the globe.
Global population increases over recent decades have caused increasing demand for wheat. In 1960, there were three billion people on planet earth. In 2016, there are over 7.32 billion mouths to feed, each year the world requires more bread, and this increases global demand for wheat. That is the essence of its role as the most political commodity.
Over the course of history, rising bread prices or the lack of availability has been the cause of civil insurrection. The French, as well as other important revolutions and political changes, began because of bread shortages. Most recently, the Arab Spring of 2010 started as a direct result of bread riots in Tunisia and Egypt and spread across the Middle East. Hungry people that depend on bread can cause dramatic changes in society and governments, and that is why wheat plays such an important role in the world.
The Many Different Types of Wheat
There are many different types of wheat grown around the world. The protein content in wheat can vary, and certain strains of wheat are better for making bread while others are more appropriate for pasta, cakes, cookies, cereals, and other staples in diets around the globe. Each year, the weather is the key determinate of wheat supplies.
In years where supplies exceed demand, inventories grow, and the price tends to move lower. In years where crop output suffers due to adverse weather conditions, supplies can become scarce, and the price rises. In 2008, the price of wheat traded on the CBOT division of the CME rose to all-time highs of $13.345 per bushel as drought conditions decreased the size of the global crop.
Those high prices led to the Arab Spring uprisings. Wheat also spiked higher in 2012 when another drought caused the price of the commodity to rise to highs of $9.4725. Since then the annual crops have been ample to satisfy global demand. In 2016, wheat has spent the majority of time below $5 per bushel and inventories rose to record levels.
Each Year Is a New Adventure
Each year is a new adventure in the wheat market as it is a commodity that most people around the world consume on a daily basis. Population growth has led the world to depend on bumper crops each year as there are always an increasing number of mouths to feed. While wheat can remain in storage for a while, but it does not have an unlimited shelf life like other commodities such as metals, energy, and minerals. Over time, wheat and other agricultural staples deteriorate and rot. Wheat can lose protein content if held in storage for long periods.
Wheat is also sensitive to changes in the value of the U.S. dollar. As the U.S. is a major exporter of wheat to the world market, a higher dollar makes the grain more expensive around the world and decreases demand for U.S. grown wheat.
However, a lower dollar will often stimulate exports from the U.S. Wheat is the most important foodstuff traded on futures markets in the U.S. It all begins with planting season and by the time harvest comes around the world has a good idea if there will be enough to feed the ever-growing global population.
Each year, the price of wheat is a function of the ultimate size of the crop in the United States. Inventories, or carryover, from recent crop years, also can influence the price of corn. The larger the carryover is, the less likely that corn prices will appreciate dramatically.
Large inventories of any commodity point to a condition of oversupply. However, when supplies are small, a deficit can develop and when stockpiles cannot meet demand the price of corn can rise rapidly. There are so many factors that go into the ultimate price of wheat each year. The most volatile season is the period between planting and harvest when there is the greatest uncertainty as to the size of the ultimate crop.
After four straight years of bumper wheat crops around the world, planting of winter wheat in the United States during the winter of 2016-2017 was the lowest in over a century, since 1909. If inventories decline in wheat over the course of 2017 the size of the crop could cause some upside pressure on the price of wheat meaning that bread prices around the world could move higher.