Agricultural News
Wheat Prices Moving Higher, Anderson Addresses What Traders are Watching
Thu, 01 Oct 2015 19:25:44 CDT
Wheat prices have crossed the $5 threshold. On Wednesday, Kansas wheat futures prices closed above that resistance level. On this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Dr. Kim Anderson said the market has tried to break through that level for the past three or four weeks.
"I think what we have to pay attention to, is that we ground our way through it, we slowly came through it," Anderson said. "Often when you break a strong resistance point like $5, that it just crashes up and you'll get a 10 or 15 cent price move. I think that tells us that this market is just going to continue to grind itself higher."
SUNUP's Dave Deken interviews Anderson about the current price situation. Click or tap on the LISTENBAR below to hear the full interview.
As Australia and Argentina begin their wheat harvest in the next two weeks, Anderson said that has held down wheat prices. With 80 percent of the world's wheat harvested, he said traders will be watching how the crop turns out in having dry weather. With production problems, he thinks the market has lowered its expectations for wheat production in Australia and Argentina. Lower production could mean higher prices for wheat.
Wheat planting has gotten started in Oklahoma. With a very dry September, much of the crop has been dusted in. There has been isolated rain showers, Anderson said that should help some areas get the crop established for fall grazing.
In looking at the cost of production, Anderson said right now the July 2016 Kansas Wheat futures contract is around $5.45 and break-even expenses are running $5.00 - $4.75 or less. He said right now the market is offering slightly above the cost of production. He said this won't cover total costs, but at least out-of-pocket expenses. If farmers are looking at selling their crop at harvest next year, Anderson doesn't think prices will go significantly higher to cover fixed costs. He said the U.S. crop would have to relatively low or planting and production of foreign wheat crops would have to be much lower.
WebReadyTM Powered by WireReady® NSI
Top Agricultural News
More Headlines...