Agricultural News
Dr. Kim Anderson with analysis on the December Grain Prices & a Look into 2021
Wed, 30 Dec 2020 11:51:37 CST
December 2020 produced a month of higher grain prices with a few days of moderately large price moves. The real market will reveal itself after the first week or two of trading in January. Producers tend to hold grain, and buyers tend to delay some buying until after January 1. The market doesn't know how much demand or supply has been pent up.
On December 1, the Medford, Oklahoma wheat price was $5.05 and the March basis was minus 34 cents. On December 28, the Medford price was $5.46 and the basis was minus 31 cents. The big price move was from $5.03 on December 8 to $5.47 on December 11 (3 trading days). Wheat prices traded between $5.31 and $5.58 for the remainder of December.
Russian wheat news may have been responsible for most of the price increase. Russian president Putin declared a "war on food prices" resulting in an 82 cent per bushel tax on exported wheat. Analysts indicated that this could result in a 40 plus cent increase in U.S. wheat prices. And they were right: $5.46 is 41 cents higher than $5.05.
The 2021 Russian wheat crop was planted under poor conditions, and reports indicate that the Russian wheat has the highest percentage of poor to very poor ratings since 2014. As with U.S. winter wheat, yields are determined during the spring months. The 2014 Russian wheat crop was the third highest on record.
Other factors that may have influenced wheat prices are: Ukraine's 2021 winter wheat crop plantings are reported to be 9.3 percent lower than for the 2020 crop. World and U.S. wheat ending stocks were lowered in the December WASDE report. And 2020/21 U.S. hard red winter wheat ending stocks were lowered to 348 million bushels compared to 505 million for 2019/20. Hard wheat world and U.S. stocks are relatively tight and demand is relatively strong.
2021 may be a good year for wheat prices. The next few weeks will set the stage, and the April through June time period will determine harvest prices.
WebReadyTM Powered by WireReady® NSI
Top Agricultural News
More Headlines...
