This week on SUNUP - Oklahoma State University Extension Grain Market Economist Dr. Kim Anderson joins host Lyndall Stout again talking marketing strategies for wheat producers this year.
According to Anderson, wheat markets rallied this week and would now allow producers to forward contract harvest wheat at $4.20. Anderson believes this rally will be sustained until it rains - if it ever does. When and if it does rain, price for wheat will go down but conversely yields can be expected to go up which will offset the lower price.
However, in the scenario that rains do not come in time and drought continues, Anderson believes the price of good quality wheat with high test weight and protein levels could command a price up to between $6.00 and $7.00 a bushel - basing that figure on the cost of hypothetically importing Russian wheat.
Given that forecasts currently are betting that the drought will continue on through at least May, Anderson says wheat farmers will need to take advantage of the potentially higher prices that he expects may come down the road. For that, he discourages producers from forward contracting their wheat at the current $4.20 price.
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