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Anderson Finds Slightly Lower Australia Wheat Production Boosting U.S. Wheat Prices

Wheat prices are in short-run up trend. On this weekend’s edition of SUNUP, Host Lyndall Stout talks with Oklahoma State University Grain Marketing Specialist Kim Anderson about the wheat market outlook. A couple weeks ago, the December Kansas City wheat futures prices bottomed out at $4.70. Since then wheat prices have gotten up to $4.90. Anderson said wheat prices have been on a long run downward trend since harvest.

“To break those trends, that one that was set in July, we need to get above $5 and really above $5.20 to break the long run down trend that started back in 2012,” Anderson said. “We need to get those futures prices up around $5.50 or $5.60.”

For wheat prices to move higher in the short run, wheat production needs to drop in key growing regions, such as Australia and Argentina. Both of those crops are being harvested right now. Anderson said Australia’s wheat production is coming in lower than expected, but he thinks that has already been factored into the market. While the wheat crop in Argentina is coming in close to expectations. A larger market factor is an up coming election. Anderson said right now Argentina has a relatively high export tariff rate for wheat and both candidates have said they will reduce or eliminate the tariff. That has farmers holding onto their wheat crop.

“I think both of those are reasons that wheat prices challenge that $5 mark,” Anderson said. “Whether they will take ‘em through it, probably not. We probably need a loss of production somewhere else to get prices to break $5 or $5.20.”

In marketing the 2015 wheat crop, Anderson recommends farmers stagger their crop marketing. He typically urges farmers sell their crop in thirds, but 2015 has turned out to be a different kind of year for marketing. Anderson said anytime farmers see prices go up 20 to 25 cents, they need to sell a portion of their crop and take advantage of these price rallies. Right now there isn’t a lot of downside pressure, so he said it’s not likely that wheat prices will go below the $4.70 level.

This week on SUNUP, we take to the sky to learn about UAV’s for agriculture and other uses from Brian Arnall.

- Then, Josh Lofton has an update on the 2015 Oklahoma canola crop.

- In the Mesonet report, Al Sutherland and Gary McManus recap how rainfall amounts and how temperatures departed from normal during October. They also have an outlook for November precipitation.

- Kim Anderson explains why slightly lower Australia wheat production boosted the price of U.S. wheat.

- In Cow-Calf Corner, Glenn Selk covers the importance of mineral supplement for cattle.

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