Agricultural News
Anderson Offers Spring Commodity Price Outlook
Thu, 19 Mar 2015 18:20:51 CDT
With the start of spring, there has been a spring rally in the markets. In this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Kim Anderson said in recent week's there has been a 39 cent price increase in wheat. It has retracted a bit, so he just hopes this rally keeps going.
The U.S. dollar index relative to other currencies continues to strengthen. Anderson said the index has increased another three percent in recent weeks, which is negative for grain prices due to exports. Meanwhile, oil prices are down 16 percent, gas prices are lower, along with corn prices being down five percent, soybean prices are down seven percent and wheat prices are up around four percent.
In looking at the commodity price outlook at harvest, Anderson said forward contracted prices for corn are $3.95 for the December contract. He said the basis around the state is at (-.45) to (-.20), except in the Panhandle where the basis is (+.20). Anderson said forward contract corn is at $3.50 - $3.75 for much of the state with the Panhandle at $4.15 a bushel.
Sorghum is at a premium right now. Anderson said the basis ranges from (-.07) to (+.10) or $3.88 - $4.05. Soybeans has basis averaging in the state around (-.90). Anderson said the November contract is $9.40, so that's about $8.50 for a forward contract. For wheat, Anderson said the Kansas City July contract is around $5.50. The basis averages about (-.50) in the south to (-.10) in the north. He said that gives farmers a forward contract price of about $5.00 - $5.40.
The price of canola has dropped substantially. Anderson said the forward contracted price is at $5.68 - $6.12. That's a sharp contract from $12 - $13 canola prices a few years ago or $9 a bushel last year. Anderson said having prices at $6 a bushel is below the cost of production and something will have to change for growers to continue growing canola.
In looking at the market outlook, the U.S. Department of Agriculture will release the planting intentions report on March 31. Anderson said we don't know what those acres will be for corn, soybeans, sorghum, cotton, etc. He also continues to watch the dollar index, as the value of the dollar continues to move. Anderson said if the index goes up, commodity prices will go lower. If the index goes lower, then commodities prices will go up.
"With all the unknowns, there's not much telling what prices are going to do except waller around for the next week until we get into April and see what this crop is like," Anderson said. "It's the time to just stay out of the market and see what's going to happen."
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 hereor through YouTube by clicking here.
Catch SUNUP: Saturdays at 7:30 a.m. & Sundays at 6 a.m. on OETA-TV
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