There is speculation there will less canola going into the market this year. On this weekend's edition of SUNUP, Oklahoma State University Crop Marketing Specialist Kim Anderson said this should translate to higher prices for canola producers.
In looking at canola prices around the world, Anderson said the Canadian futures price is at about $440 - $493/metric ton. In converting that to bushels and U.S. dollars, that equivalent to about $9.20. He finds prices in the European Union are running about $9.77 in U.S. dollars. Currently Oklahoma prices are ranging from $6.44 to $6.90 a bushel. With wheat prices at about $5 a bushel, canola is about $1.70 higher than wheat.
In looking at the outlook for wheat prices, Anderson said the market continues to be influenced by the surplus of wheat in the United States and the world.
“Of course, Russia lifted their export tax on their wheat, they’ve been aggressively selling export wheat in the market,” Anderson said. “Their selling below the world price and right now, U.S. wheat prices are above world export prices.”
In looking at ending stocks, wheat continues to remain abundant globally. Anderson said U.S. ending stocks are running higher than a year ago at 814 million bushels versus 712 million last year. This year, global ending stocks are running higher than 7.4 billion bushels, which is about six percent higher than 2014.
USDA is projecting U.S. wheat prices for 2015-2016 at $4.90 a bushel along with lower ending stocks. In looking at supply and demand, that doesn’t make sense. Anderson said one major factor that has changed the outlook is the U.S. dollar index. In looking back in 2010, he said the index was at 81 points, today it’s at 94 points. That’s 16 to 17 percent higher and that makes U.S. wheat more expensive for foreign buyers.
In marketing the 2015 wheat crop, Anderson said the marketing year price trend is usually set in the August-September time frame. That's when the European Union and other exporting countries harvest their wheat crop. With that in mind, he recommends farmers sell a third of the wheat crop at harvest, one third in the September-October timeframe, then the remaining third in the November-December time frame.
“Yes, prices are low, but he doesn’t see any reason the dollar index will go lower,” Anderson said. “If it does, commodity prices will go higher.”
SUNUP can be seen on OETA across the state of Oklahoma- Dr. Anderson's segment on the markets is one of the standard features of this weekly show from Oklahoma State University. Here is the rest of the lineup.
-- Eric DeVuyst shares the USDA’s numbers for ARC & PLC enrollment.
-- Then, Dave Lalman explains the relationship between weaning times for calves and weight gain.
-- Also, Brian Arnall shows us the latest agriculture related apps for mobile devices and how they can help producers with their summer crops.
-- In Cow-Calf Corner, Glenn Selk offers tips on protein supplement programs for weaned calves.
-- Derrell Peel explains how moisture is affecting pasture conditions, both for the better and worse. He also tells us what the beef markets are watching for from consumers.
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