Anderson Says Stronger U.S. Dollar Impacting Grain Exports

Jan 23, 2015

A stronger U.S. dollar is negatively impacting commodity prices. In looking at the dollar index, the value of the dollar has gone from 80 relative to other currencies in July. It’s up to a value of 93.6. That’s a 17 percent increase. On this weekend’s edition of SUNUP, Oklahoma State University Crop Marketing Specialist Kim Anderson said he thinks that is negatively impacting prices. Click on the LISTENBAR below to listen to the full interview.

“Now if you look at the cost of wheat to our foreign buyers, it has increased that cost about a dollar (a bushel), that’s transfers probably into around 70 cent lower wheat price,” Anderson said. “If you look at corn, its 70 cents higher to our buyers, that has probably 50 cents on our corn market and if you look at canola, the dollar versus the Canadian dollar, it’s probably lowered our canola price by about $1.15.”

In looking at Kansas City wheat contracts, Anderson thinks contracts are positive with the March contract around $5.73 and the December contract up to $6.08. He said right now there is an eight cent spread between March and July. Normally July would be less than March, so he thinks that is positive for wheat prices.

In looking at wheat and corn prices, Anderson does not think the markets are connected right now. With excess corn in the U.S. and around the world, there isn’t much need for feed wheat right now, so he doesn’t think corn is having any impact on wheat prices.

After the large downward slide of commodity prices over the last month, Anderson thinks prices are so low there is no reason to forward contract wheat, corn or soybeans, unless a producer is really worried about the price.

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