Corn Imports Blunt Impact of Tight Stocks, Draw Prices Lower, Anderson SaysThu, 02 Aug 2012 17:46:31 CDT
In this week’s SUNUP preview, OSU Grain Marketing Specialist Kim Anderson says there are technical signs grain markets have peaked with corn and wheat prices falling off.
“Technically we got up there at low volume and declining open interest, both signs the buyers just aren’t there. What we saw was corn led the prices up. Wheat seems to be leading the prices back down.”
He says supply and demand are driving the markets now, and will continue to do so as the drought cuts into corn production.
“There’s just lack of supply. You go back four months, actually go back to the June report, 166 bushels per acre, 114.4 billion bushels of corn production, more than adequate corn, building stocks to 1.8 billion bushels ending stocks. As we look at it now this week, the report came out 124 bushels per acre 111.1 billion bushels. Ending stocks with that amount of production-if something doesn’t change-you’re talking about five or 600-million bushels. That’s just not adequate corn, very tight corn stocks.”
Even with tight stocks expected in the future, Anderson says there are a couple of reasons for recent price declines.
“The prices are like a pendulum: they swing too low then they swing too high. This time they swung, they hit $8. There seems to be a wall there at $8. Plus, we imported corn in the last couple of weeks.”
Click on the LISTEN BAR at the bottom of this story to hear more of Kim Anderson’s analysis.
Also on this week’s SUNUP:
--Terry Bidwell and Keith Owens discuss the Payne County wildfire and the Firewise Communities program.
--In the Mesonet report, Al Sutherland and Gary McManus recap July's record temperatures and show us the worsening drought picture.
--Next, Dave Lalman has tips for producers on preventing heat stress in cattle, and Glenn Selk looks at how heat stress impacts bull fertility.
--Then, in Shop Stop, Wayne Kiner and Randy Taylor demonstrate a tool used to clean pipes.
--Derrell Peel compares this year's drought impact on cattle prices to the same period last summer. He also offers advice to producers with adequate forage capacity who want to purchase cattle.
--Finally, Eric DeVuyst covers canola economics and shares important tips for producers in advance of planting season.
Catch SUNUP Saturdays at 7:30 a.m. on OETA. You can see archived shows on the OSU website by clicking here, or on Youtube by clicking here.
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