Market Analysis: Wheat Price On The Run

Jan 08, 2013

The wheat price continues a downward spiral. Light to moderate volume of trading during the holidays helped accelerate the price move. The entire grain complex has suffered a major loss. The good news is the wheat market is the best performer this week in the grain commodity group despite losing 22 cents for the week.

Selling is coming from all directions. Funds are liquidating long positions in the Kansas City wheat market. In the Chicago wheat contracts, this group is adding to their net short positions. In addition, technically traders are respecting the price trend found on the charts.

Fundamental wheat traders still believe that wheat export sales will increase after the first of the year. Friday’s weekly sales reports show an improvement. This week’s total for wheat exports was 402,000 metric tons. This was in the middle of an aggressive range of estimates for a holiday trading week.

Reviewing the wheat offers from world wheat competitors, the United States wheat priced below bids from Argentina and France. Currently, these are the two major players. It is enough of a difference to offset most of the disadvantage for freight.

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Video: Residue Management

Residue Management conservation practice manages the amount, orientation, and distribution of crop and other plant residue on the soil surface year-round while limiting soil-disturbing activities used to grow and harvest crops in systems where the field surface is tilled prior to planting. This video explores how Ryan McKenzie implemented this conservation practice on his farm in Samson, Alabama.

Practice benefits:

• Increases organic matter

• Improves air quality

• Decreases energy costs

• Reduces erosion

• Improves soil health

The Conservation at Work video series was created to increase producer awareness of common conservation practices and was filmed at various locations throughout the country. Because conservation plans are specific to the unique resource needs on each farm and also soil type, weather conditions, etc., these videos were designed to serve as a general guide to the benefits of soil and water conservation and landowners should contact their local USDA office for individual consultation.