Last week, grain prices seemed as though they were on their way up. This week, however, markets have taken a downward turn. According to Oklahoma State University Grain Market Economist Dr. Kim Anderson, corn prices have dropped roughly 20 cents, soybeans down 45 cents and wheat as much as 60 cents in the past week, with an average price in Oklahoma at around $5.40 and new crop 2019 wheat at about $5.60.
He explained to SUNUP Host Dave Deeken that record high production and below normal use stock ratios has caused corn and soybean prices to lose their footing this summer in anticipation of larger supplies coming onto the market.
Anderson contends that in relation to wheat, the grains may not be totally divorced but are certainly separated on the market. Otherwise, he believes losses would be more correlated. However, Anderson is actually optimistic that wheat prices could recover between now and next harvest as harvest in the Northern Hemisphere wraps up and once the Southern Hemisphere begins its harvest. Anderson says that the market is currently buying up wheat for food, looking for high-quality grain to fill those orders - which there is little of. This has created a high demand for quality wheat and injected a premium into the market. Although prices could potentially continue to slip in the near term, Anderson says in the long run, prices could climb back up around $5.50 to $6.00 if crops in Russia, the Ukraine, the EU and other countries fail. Anderson says the word right now is that production in Europe has fallen below previous expectations, which bodes well for wheat prices.
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