Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
   
   
   
   
    
   
   
   
   
   

Agricultural News


Wheat Market Watcher Kim Anderson Thinks KC Wheat Market Has Established a Bottom

Tue, 15 Jul 2014 04:53:27 CDT

Wheat Market Watcher Kim Anderson Thinks KC Wheat Market Has Established a Bottom Oklahoma State University's Extension Grain Marketing Economist Kim Anderson has released his latest analysis of the Hard Red Winter Wheat Market- he has posted it on his website as well as provided it to us and follows:



"After July’s USDA’s WASDE reports were released, the KC September wheat contract price closed down 11 cents at $6.36. Wheat prices were up Monday morning July 14. 2014/15 marketing year hard red winter wheat production came in at 703 million bushels (mb) and ending stocks came in at 185 (mb). Both were relatively close to trade expectations. One surprise may have been USDA’s lowering of 2013/14 HRW wheat domestic use 33 mb and increasing ending stocks from 200 mb to 235 mb.


"Another surprise may have been the USDA increasing spring wheat production estimate 64 mb. This was calculated by noting a 14 mb decrease in USDA projected winter wheat production and a 50 mb increase in total wheat production. The average of the trades all wheat prerelease estimates was 20 mb lower than the USDA all wheat estimate. The average of the trade’s winter wheat production estimates was 17 mb higher than USDA’s estimate. This is positive for HRW wheat prices. The July WASDE estimates support the belief that HRW wheat stocks are tight and will remain tight through the 2014/15 marketing year. One problem with HRW wheat is that the average protein level is near 14 percent which may be too high for bread flour. The protein premium may be inverted (higher price for lower protein).
Given that U.S. 2014/15 wheat marketing year production is projected to be 7.7 percent of world wheat production and that U.S. wheat exports are projected to be 16.2 percent of world wheat exports, foreign wheat production will be the major determinant of the 2014/15 marketing year wheat price trend. This trend is normally established in the late-August/September time period.


"The KC September wheat contract price has support at $6.36. Closes below $6.36 will imply a price target of $6. The Sept contract has resistance at about $6.68. Closes above $6.68 will imply a price target of $6.90 to $7. I personally believe that the KC HRW wheat contract price has established a bottom. That doesn’t mean that the contract price won’t test $6, but I put the odds against it.


Market Strategies

"If you have a written marketing plan, follow it. If not, consider storing wheat until the October/November time period. I put the price risk at 45 cents plus about 20 cents storage. An alternative is to sell wheat and buy "near-the-money" Dec or March Call option contracts. The KC Dec call provides price protection until November 20 and the March call provides price protection until Feb 20. If you haven’t sold any wheat consider selling in one-third to one-fourth lots between now and Jan 1."




   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • USDA Secretary Perdue Believes the CARES Act Provides Much Needed Relief for Farmers and Ranchers  Sun, 29 Mar 2020 09:40:37 CDT
  • District Court Affirms State Beef Councils Are a Legal Part of the Beef Checkoff- Dismisses Litigation Brought by R-Calf USA  Fri, 27 Mar 2020 22:44:36 CDT
  • Friday, March 27, 2020 Market Wrap-Up with Justin Lewis  Fri, 27 Mar 2020 15:18:59 CDT
  • Oklahoma Grain Elevator Cash Bids as of 2:00 p.m. Friday, March 27, 2020  Fri, 27 Mar 2020 15:15:49 CDT
  • Agriculture Retailers Association Commends Congress on CARES Act Passage  Fri, 27 Mar 2020 13:57:47 CDT
  • Lucas Applauds House Passage of Support For America’s Families, Workers, and Businesses  Fri, 27 Mar 2020 13:54:47 CDT
  • State Department Clears the Way for Agriculture Workforce   Fri, 27 Mar 2020 11:18:24 CDT
  • USDA Rural Development Launches COVID-19 Resource Webpage  Fri, 27 Mar 2020 11:16:46 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Oklahoma City Farm Show KIS FUTURES, INC. Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit Ag Mediation Program P&K Equipment AFR Insurance Stillwater Milling Oklahoma Cattlemen's Association

    Our Road to Rural Prosperity sponsors!

    Banc First OPSRC ORWA TPAOO TPAOO

    Search OklahomaFarmReport.com


       
       
    © 2008-2020 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.