Agricultural News
OSU Wheat Market Watcher Kim Anderson Sees Five Dollars as Price Floor for Oklahoma Wheat This Harvest
Thu, 10 May 2012 09:27:04 CDT
If wheat prices should sell off hard in the next few days because of weakness in corn or harvest pressure, that sell off will not stick- at least that's the opinion of OSU Grain Marketing Economist Dr. Kim Anderson. Anderson says that while the US will have a larger winter wheat crop than in 2011, USDA expects 13% more this year versus 2011, the global outlook for wheat is not as good, as several other major wheat producers may well end up producing a substantially smaller crop in the months ahead.
Because of the fact that we will have a larger US crop in a world that may have actually less wheat over the next year, Dr. Anderson believes that if we get a short term sell off- that's what it will be- short term and likely not to stay around all that long.
He believes that his traditional mechanical strategy of selling one third at harvest, one third in the September timeframe and the final third in late November or December will be very good advice for this year's crop, which is projected to be120% higher than the 2011 crop- at least here in Oklahoma. The Oklahoma crop is predicted to be 154.8 million bushels, up dramatically from the 70.4 million bushels produced in 2011.
Currently cash wheat prices across Oklahoma for wheat range from $5.44 to $5.89, as of Wednesday afternoon, May 9, 2012- Anderson believes if we can more downdraft on the market and we approach five dollars a bushel or slightly below- that will be the floor for wheat prices this year and he thinks there would be an excellent chance for prices to rebound off of that bottom.
Click on the LISTEN BAR below to hear the conversation that Ron Hays had with Dr. Kim Anderson on Thursday morning after the release of the reports from the USDA- click here for our earlier report that has links back to the actual reports as well as our conversation with Tom Leffler of Leffler Commodities.
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