*This is the eighth article in our 2024 Southwest Economic Outlook series. Hear from Oklahoma State University and OSU Extension Service, and Texas A&M University and TAMU AgriLife Extension Service economists about the 2024 outlook.

Research shows the single best predictor of future prices is the current price. At this writing, wheat may be forward contracted for 2024 wheat harvest delivery in Medford, Okla., for $6 (KEN ’24 -$0.65). The Perryton, Texas, harvest forward contract price is $6.10 (KEN ’24 - $0.55) The Snyder, Okla., harvest price is $5.70 (KEN ’24 - $0.95).  

Daily, Medford, Okla., prices and USDA Oklahoma monthly average prices will be used in the analysis below.  

The starting point for 2024 Oklahoma and Texas wheat prices is $6. This price may be compared to historical price information to determine whether to adjust the $6 price up or down. 

From June 2009 through November 2023, the average daily wheat price was $5.84. The lowest price was $2.55 (Aug 30, 2016), and the highest price was $13.13 (May 17, 2022). The lowest price ($2.55) and the highest price ($13.13) may be used to establish the potential range for 2024 wheat prices (Table 1).  

Using the monthly average Medford price for the period June 2009 through November 2023 produces an average price of $5.84. The lowest average monthly price was $2.85, and the highest monthly average price was $11.64. Interestingly, the average monthly price when prices peaked at $13.13 was $11.64. The average monthly price when the low price ($2.55) occurred was $2.85. 

Related:More cotton, lower prices in 2024?

In May 2022 ($13.13 happened on May 17), wheat prices started the month at $10.43 and ended the month at $11.11. The price range for May 2022 was $2.75.  

Between June 2009 through November 2023, the average monthly price range (the difference between the low and high price in any given month) was $0.73. The largest range was $2.75 and the smallest range was $0.14. On average, there is a $0.73 difference between the low price for the month and the high price for the month. 

Reviewing the average June, July and August prices (harvest prices) indicates that the average harvest price was $5.83 and the change from one year to the next is plus or minus $1.28. The average June 2023 through August 2023 prices was $7.44. If 2024 wheat prices are predicted to be less than 2023 harvest prices, subtracting $1.28 (average harvest price change between harvest) from $7.44 produces a 2024 harvest price estimate of $6.16. This compares very close to the 2024 harvest forward contract price of $6. 

Related:WHEAT SCOOPS: 2024 wheat production, price

Using the $6.16 as the predicted average 2024 harvest price, the potential price range in the June 2024 through August 2024 period would be $4.88 to $7.44 ($6.16 ± $1.28). 

What will prices be in 2024? It is relatively safe to say that prices will be between $2.55 and $13.13. We believe that the expected price of $6.16 and the potential price range of $4.88 to $7.44 is more realistic ($6.16 ± $1.28).  

Whatever happens, the odds indicate that 2024 wheat prices will be lower than 2023 prices. 

Of course, this analysis assumes that the Black Sea area stays open.