Kim Anderson

Oklahoma State University
Wheat prices: A slow grind down, but a bottom may be near
The wheat market appears to be in a “Catch-22.” There are few reasons for prices to go lower. There may be fewer market reasons for prices to go higher
The prognosis for wheat prices: not so good
Elevators are offering from minus 60 cents to minus 46 cents basis the KC July 2016 wheat contract price for 2016 harvest-delivered wheat.
For wheat: A bad news and good news scenario
For wheat prices to go above the cost of production, world wheat production must decline.
Hard red winter wheat production in 2016 expected to be less than 2015
The January 2016 report indicated that January 2016 wheat growing conditions are better than growing conditions in January 2015.
Wheat markets have changed; profit principles haven’t
Still, the U.S. wheat industry is, and will remain, a major player in the world market.
Few reasons for wheat prices to move higher
The good news is that nearly every wheat supply and demand (market) factor is negative for prices. Prices have little reason to continue the downtrend.
Factors to use in wheat production/pricing decisions
Forward contract prices are below total operating costs and nowhere near total costs.
KC wheat contract price above $6.00?
Can KC wheat contract prices reach $6.00 by April or May? Yes. But it would take a big change (loss) in 2016 world production expectations, and probably a lower dollar index.
If wheat prices can hold out until January 15, 2016…
Wheat prices just do not have much potential to change very much until after January 15, 2016.
$4 wheat: Will it be $3.30 wheat?
U.S. agriculture pays a price to have a relatively strong economy. Since June 2014, the index of the U.S. dollar against major currencies has increased from 80.4 to 100.7.
When will wheat prices increase? It depends…
Oklahoma and Texas wheat prices will go above $6.30 when world wheat production is below 25.4 billion bushels.
Making money with low wheat prices nearly impossible
Research has shown that managing cost has the biggest impact on profit, and that managing yield has the next highest impact. Times do occur when making a profit is simply not possible.
87 percent chance of wheat price above cost of production
Depending on the farm, the variable (out of pocket) cost of production may be between $3.75 and $5.25 per bushel.
Here’s how to take guesswork out of selling wheat
Two marketing strategies take the guesswork and emotion out of selling wheat.
Low prices and crop insurance
Producers in Oklahoma and the Texas/Oklahoma Panhandle region have until September 30 to buy Multi-peril Crop Insurance .
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