Agricultural News
Kim Anderson Says Wheat Crop Looks Good, Price Outlook More of the Same
Thu, 04 Jun 2015 18:41:29 CDT
Wheat harvest is underway in Oklahoma. Elevators are receiving grain as far north as Kingfisher. On this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Dr. Kim Anderson said the quality is coming in relatively good.
"We were hoping for 11.5 percent protein or better, I think we're getting that," Anderson said. "We were hoping for test weights above 58 pounds per bushel and I think we're getting that."
Wheat prices continue to be volatile. Anderson said there was a rally early in the week that brought a 37 cent price increase, then prices turned lower. He said southern Oklahoma made a five cent basis gain, which he calls positive for prices.
Prices continue to be driven by the fundamentals. Anderson said supply and demand situation hasn't changed, but the funds are getting out of their short positions by buying into the market. He said reports show they went from 111 - thousand contracts short, that's 555 million bushels, down to about 60 thousand contracts short. That's about 250 - thousand that are buying back into the market. Anderson said he thinks the funds are driving prices higher.
The U.S. dollar index has also softened, which provides added support for the commodities market. Anderson said the index declined two and half points. That's worth about 15 cents a bushel on the export market. While that doesn't sound like much, Anderson said in purchasing a million bushel shipload of wheat that index decline makes that shipment about $150,000 less.
Next week, the U.S. Department of Agriculture will release the latest World Agricultural Supply and Demand Estimate report. Anderson said the Bloomberg survey of market analysts has all U.S. wheat production for 2015 at 2 billion 95 thousand bushels compared with 2 billion 26 thousand bushels last year. Bloomberg estimates hard red winter wheat production at 850 million bushels versus 738 million last year, so both of those are slightly higher. Ending stocks on all wheat are being forecast at 794 million bushels versus 709 million last year. Anderson said all world wheat production is being estimated at 7.4 billion bushels versus slightly lower than 7.4 billion a year ago.
"Higher ending stocks, higher production, probably prices remain in the levels we've seen over the last couple of months," Anderson said.
In looking at marketing this crop, Anderson reviewed the past 29 years of data. He found the one thing farmers shouldn't do is put a storage hedge on the crop. He found farmers can sell it all at harvest or split it up between the fall and winter months or sell it all now and buy a call option, but statistically he has found there is no difference in any of those strategies over time.
This week on SUNUP, we look at the Oklahoma wheat crop from top to bottom.
Join us as we travel U.S. 183 and U.S. 281 from the Kansas border, south to the Red River. The SUNUP crew visits with wheat producers in Woods, Dewey, Kiowa and Tillman counties.
-- In the Mesonet report, Al Sutherland and Gary McManus look at water usage in crops, the current Drought Monitor and the three-month outlook for rainfall and precipitation.
-- Next, Kim Anderson talks about wheat quality, the rally in the price of wheat and what caused the following dip in price.
-- In Cow-Calf Corner, Glenn Selk offers tips to prevent foot rot in cattle.
-- Finally, Jeff Edwards provides a statewide view of the early weeks of the 2015 wheat harvest.
Join us for 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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