Market Outlook And Market Situation! Rodney Jones OSU NW Area Extension Economist

KCBT Wheat, Dec ‘011

Wheat Considerations 2010 Marketing Year ending stocks revised upward to 861 mb. (Long term average is 579 mb.) (solid number) 2011 Marketing Year ending stocks projection around 700 mb. (early projection) Still unknowns –Final size of U.S. HRW crop. Final size of U.S. spring wheat crop. Wheat feed use. Wheat Exports. Large World ending stocks projection (much of world wheat crop is good this year) Overall wheat market is responding to corn and bean markets as much as anything

Wheat Considerations Local Basis –Basis levels have improved dramatically from last year Short crop locally, freeing up tight storage situation Good quality wheat produced in 2011, so terminals now have something to blend out the poor quality wheat from last 2 harvests Delivery problems with KCBT wheat contract have been addressed

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Is The Drought Impacting Grain Prices?

CBT Corn, Dec. ‘2011

Feedgrain Considerations Recent report showed MORE acres of corn planted, despite all the news about prevented planting. Upward revision in endings stocks for 2010 and 2011 marketing years Questions –Are the report numbers believable?, What about feed demand? What about Ethanol demand? What about exports. Lot of prevented planting of Grain Sorghum, suggests basis for grain sorghum should be strong

CBT Soybeans, Nov. ‘2011

Soybean Considerations Reports suggests some bean acreage went to corn Stocks are relatively tight, could get much tighter if there is a production glitch Bean crop is made on Aug-Sept weather Perhaps most potential for a significant price rally

Grain Market Considerations Look for tremendous market volatility as new weather news and production estimates come in. Be careful about developing a local conditions mindset Producers will understandably be gun shy about forward pricing, but if the markets offer good opportunities it may be prudent to take advantage. World growing conditions are improving in many areas, and the world will respond to high prices

Thank You Questions or Discussion !!!!