Anderson Provides Cotton and Wheat OutlookThu, 30 Oct 2014 17:45:34 CDT
In this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Kim Anderson highlights the outlook for cotton and wheat production. In traveling to southwest Oklahoma, SUNUP host Lyndall Stout asked Anderson about the cotton market. Cotton has seen a lot of changes over the last ten years in price and production globally.
Global cotton production has drastically increased since 2004. In the 10 years prior to 2004 world cotton production averaged around 90 million bales a year. From 2004 to 2014 production increased by 28 million bales to average around 118 million bales of cotton.
The United States did not experience that shift in cotton production. Anderson said there was higher production in 2004, 2005, and 2006, but overall there has been about a two million bale decline in US cotton production. Oklahoma's planted acres have declined since 2004 by about 15 thousand acres, but yields have increased so Oklahoma's cotton production has increased by about 76 thousand bales.
Global cotton prices have also increased since 2004. Anderson said that shift took place in 2008. From 2004 - 2008 cotton prices averaged 48 - 49 cents a pound. From 2009 - 2014 prices averaged 76 -77 cents a pound. Current Oklahoma cotton prices around 64 and half to 65 cents a pound, in line with this year's annual price.
In watching the wheat market prices have been all over the board. This past week prices averaged between $5.94 to $6.07. Anderson called the six dollar level "no man's land.
"I think the important price to watch now is $6.20," Anderson said. "If we can get above $6.20 then we've got some room to run for higher prices."
Globally Anderson said there isn't much to watch. The northern hemisphere crop has been harvested, the southern hemisphere with Argentina or Australia is getting close to start. There are concerns coming out of Russia with lower production. Anderson said the big news came out the Federal Reserve this week as they announced they are stopping quantitative easing. This looks to cause the value of the US dollar to go higher, thus making US crops more expensive on the world market. Anderson said this has the potential to lower US export levels, but so far levels have not been impacted yet.
In looking at the outlook for wheat prices, Anderson thinks the market has already seen its low price for the year at $5.30 a bushel. In looking ahead to 2015 wheat price, Anderson said most elevators are offering about 50 cents less than Kansas City July 2015 contract which is around $6.00, so that give farmers about $5.50 next June. He expects the bottom 2015 wheat price to be around $4.75, but if there is a big wheat crop then prices could get as down around four dollars at the very lowest.
This week on SUNUP, we travel to Altus to visit with Randy Boman about this year's cotton crop.
-Next, Kim Anderson takes a look at Oklahoma cotton production and prices, as well as the latest wheat market news.
-In the Mesonet report, Al Sutherland and Gary McManus invite viewers to the National Weather Festival November 1 in Norman. They also look at the hours below freezing and October's rainfall totals.
-In Cow-Calf Corner, Glenn Selk encourages producers to check udder soundness before making culling decisions.
-Randy Taylor and Wayne Kiner explain the difference between inverter and non-inverter generators, in Shop Stop.
-Then, Chris Richards has an overview of the Managing Farm Health for Public Health Conference on November 12 in Shawnee.
-Finally, in Naturally Speaking, Dwayne Elmore explains how to do a browse survey on your land to determine forage capacity for deer.
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