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Agricultural News

OSU's Kim Anderson Sees More Upside Potential Than Downside Risk in Current Wheat Market Outlook

Fri, 05 Feb 2016 04:33:27 CST

OSU's Kim Anderson Sees More Upside Potential Than Downside Risk in Current Wheat Market Outlook The wheat market is starting to see some factors that could bring more support to wheat prices in the near future. In this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Kim Anderson said there are a multitude of positive signals from many of the locations where wheat is produced globally. For example, there are indications of lower production in India and North Africa with dry conditions, which may cause them to import more wheat. Ukraine planted 20 percent less wheat acres. Russia is looking at potentially some freeze damage to their crop due to cold temperatures and lack of snow cover. Brazil may have to import more wheat with lower production. Europe has some quality issues showing up with some wheat having ergot in it this week. Canada also reported their wheat stocks were lower than expected and the U.S. dollar index dropped about 2.2 percent this week. Anderson said there’s a lot of positive signs out there, they are just not together yet to push prices higher.

The high U.S. ending stocks is a negative factor with over 900 million bushels. U.S. hard red winter wheat export sales have been weak, coming in lower than expected. Anderson said there are also projections of record projected world wheat ending stock of 8.5 billion bushels.

In looking at harvest prices, Anderson said the July Kansas City wheat futures contract has been trading mostly from $4.83 - $4.93. With basis, that leaves a forward contract price for harvest delivery around $4.25 - $4.41, which is below the cost of production.

“I think with the price below the cost of production, there’s no reason to price your wheat,” Anderson said. “I think there’s more upside potential than there is downside risk.”

This week on SUNUP, we travel with Jason Vogel to Tahlequah to see the area along the Illinois River devastated by record floods in late December. We’ll examine the scope of the flooding and potential safety issues, as well as hear from land and business owners.

- Then, Jason covers water testing resources and how to disinfect a well once flood water recedes.

- Kim Anderson says there could be a “perfect storm” brewing for a price rally in the wheat market.

- In the Mesonet report, Al Sutherland shows us the areas of Oklahoma that should be scouting for first hollow stem in wheat. Gary McManus has precipitation totals for 2016.

- Shannon Ferrell explains how families can successfully transition farms from one generation to the next.

- Derrell Peel analyzes the annual cattle report and looks at whether it changes the outlook for Oklahoma producers this year.

- In Cow-Calf Corner, Glenn Selk has advice on calving a hind-first calf.

Catch SUNUP: Saturdays at 7:30 a.m. & Sundays at 6 a.m. on OETA-TV

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.



SUNUP host Dave Deken interviews OSU's Kim Anderson
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