Kim Anderson

Kim
Anderson
Oklahoma State University
Articles
Wheat production costs and price
Production costs are essential to determine what the market price means to the farm enterprise.
Weakness in wheat prices is not good
The good news is that the downtrend that began in mid-June has been broken. The bad news is that the KC wheat contract price has not been above $6.20 to establish an uptrend,
Numbers don’t lie but can they be deceiving?
The key is having product to sell with the cost of production below the price times quantity produced.
How low can wheat prices go?
If producers want to use the Supplemental Coverage Option (SCO), they must sign up for SCO with their crop insurance agent by September 30, 2014.
2014 government wheat program and selling wheat
The 2014 government program may affect what crops are produced but should not affect how the crops are sold.
Wheat versus Wheat/Canola
In June of 1990 I had the opportunity to tour Russian and Ukraine winter grain farms and visit with the farm managers. They all said that mono-cropping wheat was not good for the land and that yields could be increased by using crop rotation. My comment was that Oklahoma and Texas Panhandle farmers didn’t have a choice except to mono-crop wheat.
$7 wheat on November 20, 2014
To break the wheat price downtrend, the KC September wheat contract price needs to close above $6.60.
Wheat prices are 50 cents lower, now what?
Historically, wheat prices have declined into July/August and then rallied into November/December. During the last six years, wheat prices haven’t followed this pattern
When should wheat be sold?
When to sell wheat may depend on the amount of price risks a producer can take.
Declining wheat stocks and declining prices
Who would-ah-thought that we would have declining and very tight wheat stocks and declining prices?
Three deuces wheat price range
If foreign wheat production is less than expected, wheat prices could increase $1.11. If foreign wheat production is greater than expected, wheat prices could decline around $1.11.
The odds of $5 and $7.50 wheat
The projections also indicate that between June 1, 2014, and May 31, 2015, wheat prices could be as low as $6 or as high as $9.
Drought, freeze, Ukraine equals volatile wheat prices
Given tight stocks, freeze damage, drought conditions, and political uncertainty in the Ukraine, wheat prices should remain relatively strong through June and into July.
Extreme price volatility and selling wheat
Just a few weeks' difference in timing the sale of wheat can result in either a relatively good profit or a relatively large loss.
$1.80 increase in wheat prices may be bad news
2014 harvested wheat can be contracted for harvest delivery $1.80 higher than on February 3. Potentially, higher prices could partially offset lower wheat production.
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