Agricultural News
Wheat Shows Independence From Corn in the Market, Kim Anderson Explains All
Fri, 07 Sep 2012 04:58:30 CDT
On this weekend's SUNUP program, Kim Anderson, Oklahoma State University grain marketing specialist, talks with Lyndall Stout about how corn and wheat have become uncoupled in the grain markets.
"Corn is still the dominant factor in the market, but I don't believe corn is still king. I think the situation has changed. You've still got corn and wheat trading in their dollar range, respectively, but wheat has earned some independence from corn," Anderson says.
He says there are several dynamic factors causing that separation.
"Well, wheat stocks have tightened up a little bit. And mainly in the foreign markets, the international markets you can go to Russia, Ukraine, the talk is they may limit their exports or suspend their exports. I read one commentary that they'll run out of exportable wheat at least by the end of October. They may cut it sooner. That limits the supply of wheat in the world market and makes U.S. wheat-which is right now about $20 a ton or 54 cents a bushel priced above the world market-but will bring the demand back in for our exportable wheat. And that makes wheat prices, to a certain degree, independent of corn."
He also says there is a tremendous amount of uncertainty impacting the markets as well.
"We've got 15 to 20 percent of the corn harvested so there's a lot of uncertainty about how much corn we're going to be able to harvest. There's concern right now about the hurricane and the rain that's coming through. Will that reduce corn stocks a little bit? That supports corn prices and so what we see is if wheat stocks are tight enough, if corn prices go up, wheat prices go up. Or if something happens to wheat, wheat prices will go up and corn will follow wheat. So, you've got both corn and wheat-either one of those markets and changes in the supply or demand can result in higher prices."
You can hear more of Kim Anderson's conversation with Lyndall Stout by clicking on the LISTEN BAR at the bottom of this story.
Also on SUNUP this week:
--SUNUP talks to Extension Educator Leland McDaniel at the 2012 Southern Plains Beef Symposium in Ardmore. He'll explain how producers benefit from the one-day educational event. There will also be a one-on-one interview with Colorado State University's legendary animal science professor Temple Grandin.
--Then, a wheat planting preview with Chad Webb in Noble County. Tom Royer discusses how grasshoppers impact crops and offers control options. And, Roger Gribble analyzes current field conditions, and gives advice on planting and optimal wheat variety choices.
--In Cow-Calf Corner, Glenn Selk provides tips on culling order options during drought and times of limited forage availability.
-J.J. Jones breaks down several agricultural insurance options.
--In the Mesonet report, Al Sutherland updates drought conditions, soil temperatures at planting depth and the precipitation outlook.
-Kim Anderson discusses wheat prices, along with crop insurance strategy and deadlines.
-Finally, a feature story on a shoe shine professional working at the Southern Plains Beef Symposium.
Catch SUNUP Saturdays at 7:30 a.m. on OETA. Archived shows are available on the OSU website by clicking here. They are also available on Youtube by clicking here.
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