Dr. Kim Anderson Reports World Wheat Production Up in WASDE Report, Markets React NegativelyThu, 10 Aug 2017 16:04:15 CDT
In a web-exclusive interview this week with Oklahoma State University Extension Grain Market Economist Dr. Kim Anderson, SUNUP host, Dave Deeken, enquires about the numbers in the August World Agricultural Supply and Demand Estimates report out from the US Department of Agriculture Thursday morning.
According to Anderson, the information in this report was mostly negative as it relates to supply and demand for wheat. Anderson remarked that prices began to “tank” once the report was released Thursday morning, denoting traders’ reaction.
Anderson quotes that world wheat production was raised 200 million bushels to 27.3 billion bushels, making it the second highest production on record, behind last year’s of 27.7 billion bushels and 500 million bushels above the five year average.
While US wheat production was down about 550 million bushels, he said, foreign production (mostly the former Soviet Union states and the EU) more than made up for the loss by the US this year. Foreign production he quoted at a total 25.6 billion bushels.
This production in Europe is likely to negatively impact domestic wheat prices, especially if Russia and the Ukraine’s infrastructure proves viable for getting wheat stocks exported in an efficient manner.
Anderson says he expects another rally in wheat price to happen soon, but warns that with prices as low as they are currently, a rally would not be as lucrative. Currently, the national average price rests between $4.50 and $4.80. Oklahoma’s prices typically run $0.50 below the national average leaving our prices at home around $4.30 to $4.50 and have averaged lately around $4.10.
Anderson’s outlook for this fall is that marginal acres may be left out of production this year after two years of low prices, bringing total Oklahoma wheat planted acres down yet again.
Click here to view the WASDE report for yourself, or click here to see USDA's Crop Production numbers.
There will be no airing of SUNUP this week, due to programming conflicts, but you can hear Dr. Anderson’s comments on today’s WASDE report, by clicking or tapping the LISTEN BAR below.
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