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Can Wheat Prices Afford Another Record Year - Dr. Kim Anderson Does The Math

Aug 19, 2016
By Dr. Kim Anderson 
Oklahoma State University Extension Grains Market Analyst
 
Can Wheat Prices Afford Another Record Year - Dr. Kim Anderson Does the Math
 
Oklahoma State University Extension Grains Market Analyst Dr. Kim Anderson talks wheat prices with SUNUP's Lyndall Stout this week- and examines what the effects of another record crop may do to prices in 2017. As we near the transition from the September contract to the December contract, Dr. Anderson says there are some positive signs in the market that a slight uptrend may develop. However, he doubts any big changes in wheat prices will occur. It will be hard to pull off, he says, but if anything, expect to see possibly a $0.10-15 rally. What Dr. Anderson is fully anticipating though, is a sure decline in the basis of around $0.25 as markets roll out of the September contract into December’s.
 
Why in general are prices even as low as they are to begin with? Because there is simply so much wheat, and most other grains for that matter, stockpiled in the world right now, Dr. Anderson says. He states that if looking at the last nine years, seven of them have had world record crop sizes. This year worldwide, there is a reported 27.3 billion bushels of wheat averaging approximately 25.1. He says the only way to correct this is if the market lost a foreign crop, possibly even several. He asserted that less acres of wheat need to be planted this season. He begs the question as to what would happen if we have another record crop in 2017; where would we even put it, he asks. Dr. Anderson suggests that if this does occur, producers could expect to see wheat as low as $2.00 next year. You can watch their visit tomorrow or Sunday on SUNUP- but you can hear Kim's comments right now by clicking on the LISTEN BAR below. 
 
Beyond Lyndall's weekly chat with Dr. Anderson- the SUNUP crew has a very full lineup for your viewing this weekend:
 
This week on SUNUP, they kick off their fair series with a trip to the Ottawa County Fair in Miami. Then, they will talk about canola planting preparation with Josh Lofton.
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