Anderson Analyzes Conflicting Signals in Wheat MarketThu, 17 Jul 2014 20:29:51 CDT
Wheat prices continue to slide downward. On this Saturday's SUNUP program, Oklahoma State University Grain Marketing Economist Kim Anderson says since the latest World Supply and Demand Estimates Report came out from the US Department of Agriculture wheat prices have been moving lower. Kansas City hard red winter wheat prices continue to bounce around $6.38. Anderson says if prices break the $6/bushel level, then we could have a problem.
The latest WASDE report looks positive for US hard red winter wheat with ending stock at 185 million bushels. That is lower than last year at 235 million and the five year average 337 million bushels. Anderson says that looks positive for prices, until you look at the US wheat situation for all other classes are above average for ending stocks.
World ending stocks are above average ending stocks at 6.3 billion bushels, which is above the five year average of 6.2 billion bushels. Anderson says projected ending stock stocks for other major wheat export countries, Russia, Ukraine, Kazakhstan, Argentina and Australia are projected to increase this year.
"Those countries can takeover our exports and reduce even the projected the relatively low export expectations for the hard red winter wheat for the US," Anderson said.
This year the quality of US crop could become a negative. Anderson says with protein projected to average 14 percent, that will be too high for a good bread milling quality, so millers may have to blend it with lower protein soft red winter wheat or find some lower hard red winter wheat. He says the hard red spring wheat can also work as a substitute, which is also negative for hard red winter wheat.
In looking at the market outlook, Anderson says farmers need to decide if they can afford to the risk of another 30 - 40 cent lower price, in hopes that something will happen to the Argentina or Australia crop and US prices recover. He says farmers have difficult decisions to make, but if they can't take the risk then they should begin to sell some of their crop.
This week on SUNUP, we visit OSU's Big 3 Field Days with an overview from Rusty Gosz. Then, the animal science herd managers tell us what judges consider when evaluating sheep, beef and swine. Presentations feature Darin Annuschat, Jeremy Leister and John Staude.
-In the Mesonet report, Al Sutherland has an overview of July's cooler temperatures, two-month rainfall totals and improving soil moisture.
-Next, Kim Anderson analyzes the conflicting signals in the wheat market.
-Jody Campiche has an update on crop insurance for canola producers and the Supplemental Coverage Option (SCO) in the new farm bill.
-In Cow-Calf Corner, Glenn Selk explains the benefits of combining the Oklahoma Gold supplement program and deworming in late summer.
-Then, Sara Siems invites viewers to the 2014 Statewide Women in Agriculture & Small Business Conference August 7-8 in Oklahoma City.
-Finally, in Shop Stop, Randy Taylor and Wayne Kiner show viewers how to adjust v-belts to reduce slippage.
Catch SUNUP: Saturdays at 7:30 a.m. & Sundays at 6 a.m. on OETA-TV
Catch SUNUP online through the OSU website or through YouTube.
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