Anderson Says Commodity Prices Holding for Direction from Friday's Supply and Demand ReportsThu, 08 Oct 2015 17:24:39 CDT
Traders will be watching the latest supply and demand numbers that will come out from the U.S. Department of Agriculture Friday morning. On this weekend's edition of SUNUP, Oklahoma State University Grain Marketing Specialist Kim Anderson said it will take until Monday or Tuesday to see how the market reacts to these latest production and stocks estimates.
“I think the big market day is going to be Monday to see what happens to our corn, sorghum, wheat, soybean prices,” Anderson said.
Last week, wheat prices surpassed the $5 mark and have stayed above that threshold this week. In breaking $5, the next challenge was breaking the $5.20 level, the next price ceiling will be $5.30. Anderson said wheat futures prices have gotten up to $5.21, tapped it, then by the end of the week prices turned lower. He thinks traders were covering some long positions before the release of Friday’s USDA report. On Monday, Anderson will be watching to see if prices can stay above $5 or if they will slide lower to $4.80. If prices move higher and break $5.20, he thinks prices could keep moving higher to $5.40, but it will all depend how the market handles these latest set of production numbers from USDA.
Corn prices have been less than stellar this year. Currently, Oklahoma cash corn prices are ranging from $3.40 - $3.70, depending on location. In looking at the December corn futures contract, Anderson said prices are around the $4 level. If prices can break through that level, he thinks prices could rally higher. If prices break $4, then priced could go up to $4.20. If prices stay at $4, Anderson looks for prices to trade sideways in the $3.80 - $4 range.
Sorghum prices are running around 19 to 20 cents below corn. Last year, sorghum was being sold at a premium to corn with the strong demand from China. Anderson said this year sorghum is back to being at a discount relative to corn prices.
Soybeans have been trading within a 40 cent trading window this year. Anderson said if prices can break higher, he could see prices going up 40 cents, but right now there isn’t a lot driving soybean prices. He doesn’t expect prices to trade much lower, but it will also be hard to get out of this trading rut. The price movement will also depend on Friday’s USDA report.
Regardless of the crop, there isn’t a lot driving the market right now. Anderson said the U.S. corn and bean harvest is about half done, plus traders are also watching world demand. But there is some good news with these short run-up trends.
“Even though they are grinding their way up slowly in the wheat and corn and soybeans- at least they are not going down, are moving sideways,” Anderson said. “I think as we get through this harvest, Australia and Argentina are starting their wheat harvest in the next couple weeks and see what happens there. Of course it’s dry in Australia, but there’s some concern, I think that’s part of the reason we’ve seen these higher prices, but we could have some impact at least on the wheat prices on what’s going on in the Southern Hemisphere.”
If farmers still have wheat in the bin, Anderson recommends farmers take advantage of these price rallies by setting a price target and every time wheat rallies 20 cents, then sell a little wheat. He continues to stand by his traditional marketing plan of a third, a third and a third. This allows farmers to farmers stagger their crop marketing. He said farmers can sell it in thirds or fourths between now and December.
SUNUP's Dave Deken interviews Kim Anderson. Click or tap on the LISTENBAR below to listen to this full interview.
This week on SUNUP, we learn from Dave Lalman about how record keeping can improve cattle efficiency.
- Then, Jeff Edwards has a planting update for winter wheat and advice for armyworm-damaged wheat.
- In the Mesonet report, Al Sutherland and Gary McManus have the rainfall picture since the end of July and explain how much water is in the top 16 inches of the soil.
- Derrell Peel tells us why the livestock markets need to move overweight cattle out and what could be in store afterward.
- Then, in Cow-Calf Corner, Glenn Selk has advice for pricing culled cattle.
- Next, Kim Anderson says there’s not a lot of movement in the commodity markets, but what is moving is not moving down.
- Finally, we look at some of the impacts 4-H has had on Oklahoma youth.
Join us for 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.
WebReadyTM Powered by WireReady® NSI
Top Agricultural News