Agricultural News
High Prices, Volatility in Grain Markets Illusory, Anderson Says
Tue, 20 Nov 2012 18:26:40 CST
In his weekly preview to this week's SUNUP show, Kim Anderson talks with Austin Moore about seemingly high prices and high volatility in the grain markets. He says the numbers may be higher, but the percentages tell the tale.
"We've been talking about prices moving in this 92-cent sideways pattern and it's been in it since July 13th. What you've got to look at is let's go back two years, three years, when prices were down around the $3 level. If you got a ten-percent price move with $3 wheat, that was 30 cents. Now, with near $9 wheat, if you get a ten-percent price move, that's 90 cents.
"And so what we saw back a couple of years when we had lower prices you had 30-cent channels. Now, with $9 wheat, we have 90-cent channels. We really don't have more volatility, but we do have variability in the market because, also in the last five years, we've seen prices move from about $3.08 up to as high as $12.58 or about a $9.50-cent spread. And there's a lot of uncertainty and a lot of volatility in that."
Anderson says while the uncertainty in the markets may be discomforting to producers, they should pay attention to the business at hand and not be overly concerned.
"I think producers should just produce a good quality product. They've got to realize they are not marketing wheat. They can merchandise wheat. They can sell wheat, but they market land, labor, capitol, and management. It's those assets that they're going to use to generate a profit. that land, let's just take land, they're going to produce canola or wheat or corn or beans-the crop that's going to produce them the highest profit. So, they've got to concentrate on doing that. And they're going to make that money in their office with their pencils, budgets, sitting down to figure out how to best use that land, labor, capitol, and management."
Also on this weekend's SUNUP:
--A visit to Rogers County for perspective on pecan harvest with John Haase and grower Bill Clark.
--In Cow-Calf Corner, Glenn Selk explains the importance of good body condition scores for first-calf heifers.
--Derrell Peel takes a look back at fall cattle markets.
--In Shop Stop, Randy Taylor and Wayne Kiner provide hydraulic safety tips.
--Donna Patterson and others explain how those with special needs benefit from horseback riding lessons at Bit by Bit, a therapeutic equine center near Claremore.
--Al Sutherland has an overview of Mesonet's updated website.
-Finally, a conversation about the Red Shirt Orange Friday program with Shelly Sitton and Jake Gankofskie.
Catch SUNUP Saturdays at 7:30 a.m. on OETA. You can watch archived shows on the Oklahoma State University website by clicking here, or on Youtube, by clicking here.
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