Market Headline News: Wheat

Kim AndersonOklahoma State University

KCBT Wheat Weekly Nearest

KCBT Wheat July Daily

What will it take for $5 wheat?

• $5 wheat requires 620 mb ending stocks• Average use 2.16 bb• 980 – 620 = 360 0.36 bb

1.80 bb• Four times since 1975 below 1.9 bb

Expected Production

• Winter Wheat:• 37.1 million acres planted• 0.81 (percent harvested)• 44 bu/ac average yield• 1.33 bb

• Spring Wheat• 15.7 million acres harvested• 40 bu/ac average yield• 0.63 bb

• 1.96 bb Total Production

Yield More Important than Price

29 bu/ac x $5 = $145

40 bu/ac x $3.75 = $150

June 2010 wheat price

KCBT July $5.13

Basis -$0.80

$4.33

U. S.10%

Ar-gentina

2%Aus-tralia

4%

Canada4%

EU-27 19%

Brazil1%

China17%

Select. Mideast

3%

N. Africa

2%

Pak-istan3%

India11%

Russia7%

Kazakhst2%

Ukraine3%

E Eu4%

Other 7%

Jun17% Jul

17%

Aug21%

Sep9%

Oct5%

Nov2%

Dec3%

Jan1%

Mar3%

Apr9%

May13%

World Wheat Production

What to Hope For Marketing Strategy

• Hope for:–Above average yields.–Below average yields

• Market Strategy:–1/4 to 1/3 at harvest.–2/3 to 3/4 fall & winter.

OETA Saturday Mornings

7:30 a.m.