Kim Anderson Says No Good News In USDA ReportFri, 12 Sep 2014 11:50:59 CDT
On Thursday the US Department of Agriculture released September's supply and demand report. Oklahoma State University Grain Marketing Economist Dr. Kim Anderson tells Lyndall Stout on OSU's SUNUP TV program said there were some surprises in the report by raising the world wheat production was raised from 26.1 to 26.5 billion bushels. World ending stocks increased from 7.1 to 7.2 billion bushels. US ending stock also increased to 698 million bushels. Anderson said that's all negative information that could push the market below the $6 level.
USDA also raised nation's projected corn production to 14.4 billion bushels. USDA projected higher corn usage, so US corn ending stocks were raised to over two billion bushels.
The latest report also projected higher soybean production to 3.91 billion bushels and ending stocks of 475 million bushels. Anderson said global soybean stocks were raised as well, so again all negative information for the soybean market.
Prior to the USDA report corn prices were already weak. Anderson said with the higher ending stocks and yield projections than what the trade expected the price could go down, but he doesn't think it will be significant.
Of the three commodities, Anderson said he thinks soybeans will take a bigger hit than corn or wheat.
In looking at the price trend of wheat, Anderson said the market is no stranger to a downward slide this time of year. In going back to February 2011 prices were at $9.90. From February 2011 to May 2012 prices fell to $6 a bushel. Wheat prices went back up by November 2012 to $9.35, then prices fell to $6 by January 2014. Since May 2014, wheat prices have fallen from $8.54 to $6. Anderson said right now the market is moving sideways between $6 and $6.70 a bushel.
"If we break through that next Tuesday, then I think we are going to go on down," Anderson said. "The support levels I have below $6 are about $5.50, $5, then $4.50. I think $4.50 would probably be close to the bottom price that we will see over the next 12 to 18 months."
Many would expect that wheat would be moving higher with a below average US wheat crop, below average US wheat ending stocks and below average hard red winter wheat stocks. Anderson said our price is being determined on the world market and right now the world is producing a lot of wheat.
Going forward, Anderson said he will watching to see if the wheat market falls below the $6 level. If the prices drops below $6, then he could see it falling another 20 - 30 cents, possibly at the $5.50 level.
You can see their full conversation on SUNUP this weekend on OETA across the state of Oklahoma- or you can listen to Dr. Anderson's current wheat market analysis right now by clicking LISTEN BAR at the bottom of this article.
This week on SUNUP, we travel to OSU's Eastern Research Station at Haskell. Brian Pugh and Rodney Farris show us a unique corn demonstration plot commemorating Extension's centennial. It features heirloom and modern corn varieties managed with historical and present-day farming techniques.
-- In the Mesonet report, Al Sutherland and Gary McManus look at the percentage of normal rainfall, cooler temperatures and the drought monitor.
-- Kim Anderson looks at the downward trend of wheat prices. He also analyzes the latest World Agricultural Supply and Demand Estimates (WASDE) report and how it could impact prices.
-- In Cow-Calf Corner, Glenn Selk explains the value of testing protein content in hay.
-- Next, Jason Warren shows us the results of ongoing no-till research.
-- Jody Campiche explains changes in the USDA's Livestock Forage Program.
-- Brian Arnall has an overview of useful agricultural calculator apps for smartphones and mobile devices.
-- Finally, we close with highlights from the OSU Cowboy Marching Band's halftime tribute to the Extension centennial.
Catch SUNUP Saturdays at 7:30 a.m. & Sundays at 6 a.m. on OETA-TV
Catch SUNUP online through the OSU website by clicking here or through YouTube by clicking here.
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