Agricultural News
Anderson Says 2015 Nothing Like 2010, Don't Expect Wheat Prices to go Significantly Higher
Thu, 20 Aug 2015 18:27:31 CDT
Global supplies of wheat have swung like a pendulum over the last five years. On this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Kim Anderson said a lot has changed since 2010 when wheat prices in Oklahoma were at $3.50 in mid-June and world production was expected to be at 24.7 billion bushels, a near record. From that point, he said every report lowered the world wheat production estimate. With lower production, the price of wheat started going up. The U.S. was also competitive on the global market in having the U.S. dollar index in the 75 - 80 point range. Anderson said wheat prices went from $3.50 in June to $6.20 on September 1 and they were at $8.90 by February.
This year the exact opposite is happening. Now nearly every report coming out is raising world wheat production. Anderson said higher production has been reported in Europe, Germany, France, Russia, Ukraine, Australia and Argentina. He said around the world every report raises production and the price of wheat goes down. This time around, the U.S. dollar index isn't so friendly. Anderson said the U.S. dollar index is around 96 - 97 points, which is about 20 to 25 percent higher than in 2010. That makes wheat prices another $1.25 - $1.50 lower right now.
Farmers still have wheat to move. In visiting with area grain elevators, Anderson said they have a higher percentage of wheat in the bins for the 2015 harvest than a year ago. He said there is still a lot of wheat in the bin for farmers to sell, which is also negative for Oklahoma prices.
SUNUP Host Lyndall Stout asks Anderson about marketing the 2015 crop. He encourages farmers to sell on the rallies. He believes the price is building a floor right now. If the price falls, he predicts there is about a 30 cent downside potential. With a 60 percent chance the price will go higher and a 40 percent chance it will fall lower. With those odds, he recommends farmers stagger their marketing by setting a price target and a date target and he recommends farmers sell their crop between now and the January - February time period.
This week on SUNUP, we kick off our 2015 fair series at the Stephens County Free Fair in Duncan. We start with Oklahoma State University Small Grains Extension Specialist Jeff Edwards, looking at what producers can do to help their 2016 wheat crop.
-- Also, wheat pathologist Bob Hunger warns producers about a possible return of a wheat smut, which has not been seen in Oklahoma in many years.
-- In the Mesonet report, Al Sutherland shows us how deep plants will have to reach to find moisture, despite a rainy summer.
-- Derrell Peel explains what to expect in the markets as cattle move to pasture in the fall.
-- Extension Beef Cattle Specialist Dave Lalman covers feeding options for sprouted wheat.
-- Kim Anderson explains how the rising world wheat production has caused the price of wheat to slide further.
-- In Cow-Calf Corner, Glenn Selk says fall-born calves do come early, so be prepared.
-- Finally, we find out what makes the 108th Stephens County Free Fair one to remember.
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