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Strategies for Capturing High Wheat Sales

June 13, 2011

By Kim Anderson, Oklahoma State University  Extension Economist 

Wheat prices are expected to remain volatile. Between now and December 1, wheat prices may be anywhere between $7.50 and $11.

The 43-cent spread between the KCBT July and Dec contract prices indicate that the market will pay storage and interest.
Producers may consider staggering sales in lots of one-fourths or one-thirds between now and January 1, 2012. Another strategy is to sell all the wheat and buy KCBT Dec Call Option contracts. The options may be offset at different times between harvest and November 15.
Watch Anderson’s latest grain market analysis video from SUNUP TV:
The Latest Wheat Market Moves
According to Friday’s Kansas City Board of Trade Review, Kansas City wheat futures traded lower, feeling pressure from the HRW wheat harvest that is progressing into Kansas this weekend. Yields continue to be variable, traders said, with some reports of production a little better than previously expected.
Traders continued to roll more positions out of the KC July contract into deferred contracts today, but not as much as Chicago wheat futures, traders said. Chicago nearby July traded significantly higher today as rumors stirred about possible use of SRW as a feed grain source, traders added.
KCBT July wheat settled 3 1/4 cents lower at $8.68. Today's trading volume was  estimated at 39,907 contracts.


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RELATED TOPICS: Wheat, Marketing, Crops, Analysis

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