OSU’s Kim Anderson on USDA Ag Outlook Forum and Price Expectations

The following is a write-up from OSU Extension Grain Marketing Specialist, Kim Anderson, on the USDA’s 99th Annual Outlook Forum:

At the USDA 99th Annual Outlook Forum, the 2023/24 marketing year major crop supply and
demand estimates were released. Probably the most useful estimates were the average
annual prices.

The 2023/24 marketing year average prices were $8.50 for wheat, $5.60 for corn,
$12.90 for soybeans and 80 cents for cotton.

During the last 10 years, Oklahoma wheat prices have averaged six percent less than
U.S. wheat prices. This implies that Oklahoma’s 2023/24 marketing year average wheat price
is projected to average about $8. Wheat may be forward contracted for 2023 harvest
delivery in Medford Oklahoma for $7.60. Southern Oklahoma’s 2023 harvest forward
contract price is about 40 cents less than the Medford price.

Oklahoma average annual corn prices average four percent less than U.S. average
annual prices. This implies that 2023/24 marketing year corn prices will average about
$5.38. Corn may be forward contracted for 2023 harvest delivery in Pond Creek
Oklahoma for $5.50. The Oklahoma Panhandle harvest forward contact price is $6.30.

Oklahoma average annual soybean prices average three percent less than the U.S.
average annual prices. This implies that the 2023/24 marketing year soybean prices in Oklahoma will average $12.51. Soybeans may be forward contracted for 2023 harvest delivery in Pond Creek
Oklahoma for $12.84.

Oklahoma cotton prices tend to average about three cents less than the ICE/US cotton
futures contract price. The ICE/US Dec ’23 cotton contract price is about 84 cents. This
implies a 2023 Oklahoma cotton harvest price of about 81 cents.

The USDA Crop Condition Reports indicate that Oklahoma’s 2023 wheat crop
condition is below average. However, producers report that recent rains have improved
wheat crop conditions. Wheat producers are concerned about weed infestation. With potential
$8 wheat, it may be advantageous to control the weed infestation to increase yields and
reduce dockage.

2023 world wheat production is projected to be a record or near record crop. But with
relatively tight world and U.S. wheat stocks, wheat prices are expected to remain in the
$8 range.

A caveat is the Russian/Ukraine war. If by some chance a peace agreement was
negotiated, wheat price could decline to the $6 level.

During the 2020/21 wheat marketing year, COVID caused the price of wheat to increase from
about $4.50 to $8. During the end of the 2021/22 wheat marketing year, the
Russian/Ukraine war caused wheat prices to rise from $8 to $13.With COVID under control,
wheat prices have fallen into the $7.50 to $8.50 range.

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