Anderson Offers Little Optimism for Higher Commodity PricesFri, 21 Nov 2014 06:06:33 CST
The outlook for commodity prices isn't very bright. That's according to Oklahoma State University Grain Marketing Specialist Dr. Kim Anderson. In this weekend's edition of SUNUP, Anderson breaks down the outlook for canola, wheat, corn and soybeans. Commodity prices on all four crops are struggling to move higher. Click on the LISTEN BAR below to the listen to the full interview that will air on SUNUP.
Canola has been a pretty good crop in Oklahoma, but there continues to be downward pressure for prices. Anderson said two years ago canola prices were averaging 12 to 13 dollars a bushel and this last year prices were averaging around $10 a bushel. He had been predicting prices of $8.50 for June 2015, but it doesn't look like that will happen with canola prices now below eight dollars a bushel. He just hopes canola prices will come back up by the 2015 harvest.
Meanwhile wheat prices continue to hover around $6 dollars a bushel. Anderson said currently the upper price limit is $6.20 and the lower limit is at $5.60 and the market has to break either of those numbers in order to start an upward or downward trend. Until that happens, he sees the wheat market wallowing around.
One news item that caused some temporary excitement in the wheat and corn markets is that a cargo of wheat from France has been imported into the US. Anderson said this will not have any impact on hard red winter wheat prices except psychologically, as this wheat that will not be used for bread making, but rather for feed for livestock.
In looking at US wheat exports, the latest World Agricultural Supply and Demand Estimates (WASDE) report showed a 21 percent decline in exports from last year for all wheat classes. Anderson currently the US is down 26 percent. With hard red winter exports, Anderson said WASDE is predicting exports down 28 percent less than last year. Currently exports are 38 percent less than last year.
"Our problem right now is we just don't have sufficient demand for our wheat, until we do we are going to wallow around," Anderson said.
Corn prices have been disappointing for farmers as prices continue to slip lower. Anderson said prices were moving higher, but now we have broke that up trend with $3.90 on the March contract. He said corn prices have support at $3.70, but if they move lower than that there could be a down trend. Anderson believes that for the market to move higher, corn prices will have to break four dollars.
The market has a lot to chew on right now. The US is predicted to produce a record corn crop this year. Anderson said the corn market is also watching the importation of this wheat from France. The quality of the crop in France and Germany was poor due to bad weather during harvest, so this wheat is being imported very cheaply. With the higher value of the dollar, that lowers the price of the French wheat by 50 to 60 cents a bushel. Anderson said you can bring it into the US cheaper than you can buy US corn.
Soybeans have also broke their up trend as well. Anderson said soybeans have support at $10. If the January contract drops below ten dollars, then prices could continue lower to $9.50. Anderson said to continue the up trend prices have to break $10.50.
Overall, Anderson said with the big corn and soybean crops and little demand for wheat he doesn't any of these prices going up in the near future.
In addition to Kim Anderson's regular conversation on SUNUP- they will be exploring the science behind canola's ability to reduce weeds in wheat fields. Interviews include Angela Post, Josh Bushong and Jeff Edwards.
In Cow-Calf Corner, Glenn Selk offers advice on adjusting supplements during winter weather events.
In the Mesonet report, Al Sutherland evaluates this week's warming trend, wind speeds, soil temperatures and the percentage of normal rainfall.
Then, Jody Campiche tells us what landowners and producers can organize prior to registering for farm bill programs. We also remind viewers about upcoming Extension farm bill meetings through December.
Derrell Peel analyzes the impact of winter-like weather on cattle markets and looks at overall U.S. beef production.
Finally, in Naturally Speaking, Karen Hickman has tips on managing and stocking native pasture for better growth during the next grazing season.
SUNUP can be seen on OETA across the state of Oklahoma- Dr. Anderson's segment on the markets is one of the standard features of this weekly show from Oklahoma State University. Catch SUNUP online through the OSU website by clicking here or through YouTube by clicking here.
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