Wheat prices have weakened since winter, world supply levels are bearish, and the loonie is up. “Many farmers are wondering, ‘What do I do now?’” said Neil Blue, market specialist at Alberta Agriculture and Rural Development.
Farmers thinking about signing a forward pricing contract should first consider if the price will provide an acceptable margin above cost of production, he said. Also look at expected production, if the contract has an ‘act of God clause,’ what happens if the grade is different, delivery terms, and how contract disputes are resolved.
“A rally in the market can happen any time, so it’s a good idea to have price targets in mind,” he added.