Anderson Reflects On Downward Trend of Grain MarketFri, 11 Jul 2014 05:41:08 CDT
The commodity market has taken a nose dive. In the last two weeks wheat has dropped 70 cents, corn has lost 50 cents and soybean are down $1.25. On this Saturday's SUNUP program, Oklahoma State University Grain Marketing Specialist Kim Anderson considers some of the factors that have resulted in this down turn.
Anderson says as you look at the wheat market, the price decline is being caused at least in part by the growing production of wheat around the world.
"Those ending stocks just keep going up as world production looks good," Anderson said. "Of course in the hard red winter wheat area our harvest probably came in as we expected, soft red maybe a little less, spring wheat looks good and the deal is, we just got more than adequate wheat around the world."
In looking at corn, US production will also grow this year. Anderson says US production probably around 14 billion bushels this year, that is going to be a record or near record corn production. That means ending stocks of corn are also growing. Two years ago stocks were at 800 million bushels and he expects this year for stocks to increase to around 1.2 or 1.3 billion bushels.
"Next year they are looking at 1.8 billion bushels of corn on ending stocks," Anderson said. "So what we got is production higher and we got more both in the US and world, more corn in the bin and of course higher supply and lower demand."
The biggest price drop has happened in the soybean market. Anderson says that also stems from growing ending stocks for the next marketing year.
"They (soybean stocks) have been tight for the last few years with record soybean production, I think that's a given, maybe even 3.7 billion bushels of soybean production we're going to have our ending stocks go up by 250 percent, that's going to lower price," Anderson said.
This week on SUNUP, we look at heat stress in cattle with Michelle Calvo-Lorenzo.
-Then, Kim Anderson explains why wheat, corn and soybean prices have been in sharp decline.
-In the Mesonet report, Al Sutherland talks about Wednesday’s rain and highlights a series of Mesonet crop advisors.
-Next, Jody Campiche explains the farm bill implementation and timelines.
-Derrell Peel joins us to discuss the impact higher cattle and beef prices are having on demand.
-In Cow-Calf Corner, Glenn Selk looks at nitrate levels in summer annuals when cut at different times of day.
-Brian Arnall stops by with a series of Ag Apps that help producers stay on top of agricultural news.
-Finally, Karen Hickman and Keith Reed show us a stand of kudzu, “the vine that ate the south,” here in Stillwater.
Click on the LISTEN BAR below to hear Kim Anderson's full report, as produced by Oklahoma State University's Ag Communications Department.
Catch SUNUP online through the OSU website >or through YouTube.
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