Anderson Says KC Wheat Price At Critical LevelThu, 24 Jul 2014 19:18:51 CDT
This past week Kansas City wheat fell below the support price at $6.36, where is it going from here? On this Saturday's SUNUP program, Oklahoma State University Grain Marketing Economist Kim Anderson provides his forecast for the market.
"If it can back through that $6.36, which I give it a 40 percent chance of doing that in the next couple weeks, then we'll take a run back up at that $6.60," Anderson said. "I think it will probably go down and challenge the $6 - $6.05 level on that Kansas City September contract, if it breaks it .....its probably going to down $5.70 or $5.75."
The drop in price can be attributed to a variety of factors. Anderson says hard red winter wheat stocks in the US are very tight with the short crop, but domestic stocks of other wheat classes like hard red spring and soft red winter wheat look to be above average, along with world ending stocks projected to increase.
If producers are holding onto their wheat, Anderson says the strategy should be marketing a third at harvest, a third in September-October, then a third in the November-December timeframe. If farmers have sold any of the crop so far, he says its time to sell some of it.
"If they hold it, I think they are looking at a 60 cent downside risk, downside lower price," Anderson said. "If they are selling, I think they are giving up the potential for maybe a 40 or 50 cent price increase, so that's their risk."
Next week Anderson will be in attendance at Canola College in Enid on Tuesday and Altus on Wednesday. Anderson says he will present on the world canola production and the price outlook. Anderson says he will also compare growing wheat only to a wheat-canola rotation. His figures show it makes sense to rotate the crops to increase farm income.
This week on SUNUP, we feature highlights from the 93rd 4-H State Roundup. Interviews include Kevin Allen and Taylor Harbuck, as well as Karlie Wade, who serves on the state leadership council.
-In the Mesonet report, Gary McManus looks at the recent cooler-than-normal temperatures, heat index numbers and how last week's significant rainfall improved the drought monitor.
-Next, Kim Anderson suggests marketing strategy for producers as wheat prices continue to fall and examines the profit potential of wheat-canola rotation.
-In Cow-Calf Corner, Glenn Selk offers tips on following the Beef Quality Assurance guidelines.
-Shannon Ferrell invites viewers to the Farm Transition Workshop August 15-16 in Stillwater.
-Then, John Weir explains how people may more easily access the Prescribed Fire Handbook via a mobile-friendly website.
-In Food Whys, William McGlynn has an overview of the growing Oklahoma wine industry.
-Derrell Peel examines the continuing trend of higher consumer beef prices, and the forage cost and grazing outlook for fall.
-Finally, we showcase the 4-H and FFA commitment to community service at a petting zoo organized by the Ponca City chapters at the Oklahoma Special Olympics.
Catch SUNUP: Saturdays at 7:30 a.m. & Sundays at 6 a.m. on OETA-TV
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