Grain prices continue to decline as offers for forward contracting wheat at harvest delivery fell below $4.00 this week. The most producers can hope to forward contract their wheat for at the present time is somewhere between $3.95 and $3.97. This week on SUNUP, Oklahoma State University Extension Grain Market Economist Dr. Kim Anderson joins host Lyndall Stout to compare the current market to how it looked back in February of this year.
According to Anderson, the forward contract price then was about $4.90. Since then, prices have dropped roughly a dollar. Anderson says previous expectations for what the Russians had coming into the year in terms of exportable wheat were just simply wrong. Near the end of last year, the trade anticipated that Russia would exhaust its supplies by January or February of this year and give the US and opportunity to command more of the market. Fast-forward to today and Russia is still marketing wheat with what looks to be yet another massive crop coming down the pipeline.
The fact that the market value of the USD has increased has not helped the situation either, making US wheat more expensive. In addition, Anderson says wheat production around the world is flourishing, even in nontraditional wheat producing countries. This has led to more competition in the marketplace and reduced the overall export demand worldwide.
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