Kim Anderson Advises Farmers Consider Returning to Wheat as Profitability in Summer Crops FadeThu, 16 Aug 2018 18:45:12 CDT
Given the steady decline in commodity prices, particularly in the soybean market, the 2018-2019 crop year may be a good time for many farmers in Oklahoma to consider returning to wheat rather than some of the other summer crops that have drawn their attention the last few seasons. Oklahoma State University Extension Grain Market Economist Kim Anderson made that argument this week in an interview with SUNUP Host Lyndall Stout.
In the past few weeks, commodities across the board have steadily declined. Not just grains but all commodities- metals, fuels, gold, silver, etc. Anderson attributes a large part of this to the strengthening of the US Dollar. In the past week, the USD has risen almost two percent and in the past few months, nearly four to five percent. In that time, the price of wheat, corn and soybeans have all dropped from 30 cents to as much as a dollar or more. Wheat had rallied up to $6.00/bu. but has since fallen below $5.00. Anderson says the US has simply been outpriced by the Black Sea market.
According to recent reports, Egypt just bought a large cargo of wheat from Russia for $7.00 which adjusted the inland price of wheat here in Oklahoma down to around $5.00, knocking off that rally that had excited the market.
In planning for this coming year, though, Anderson advises farmers to consider the bigger picture of the crop situation as they make their planting decisions. This year, soybeans overtook corn as the major player in agriculture. And currently, the US is embroiled in a trade war with its largest soybean customer, China, which has significantly damaged prices. But, Anderson says all markets are depressed due to overwhelming production and stocks weighing on prices. Anderson insists that one cannot expect to increase production and ending stocks as much as they have been this year (many of which exceeding existing records) and not see prices decline. Anderson suggests farmers consider returning to wheat as an alternative.
You can hear Kim's full remarks on the current market situation, by clicking on the LISTEN BAR below.
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