Wheat Prices on the Move

June 21, 2010 03:08 AM
 
by Kim Anderson, Oklahoma State University Professor and Extension Economist
 
The basis has improved 15 to 20 cents in most southern Oklahoma elevators. Wheat basis in southern Oklahoma and the Texas and Oklahoma Panhandles averages about a minus $1.35. The wheat harvest is just starting in the Panhandles. If the protein averages above 11.5, the basis may increase to a minus $1.20 or higher. The basis in Central and Northern Oklahoma is averaging about a minus 1.15. All these basis are expected to improve another 20 to 30 cents between now and Dec. 1.
 
The basis has improved 15 to 20 cents in most southern Oklahoma elevators. Wheat basis in southern Oklahoma and the Texas and Oklahoma Panhandles averages about a minus $1.35. The wheat harvest is just starting in the Panhandles. If the protein averages above 11.5, the basis may increase to a minus $1.20 or higher. The basis in Central and Northern Oklahoma is averaging about a minus 1.15. All these are expected to improve another 20 to 30 cents between now and Dec. 1.

 
There has been an increased interest in low protein wheat for livestock feed. Reports indicate that wheat for feed is being priced at about 90% the value of corn. Feedlot mills want relatively high test wheat with limited amounts of rye. They report that rye does not mill well during the "flaking" process.
 
The KCBT July wheat contract price has support at about $4.80 and resistance at about $5. If the July wheat contract price closes above $5 two consecutive days, the next price target is $5.25. As the harvest progresses through Kansas, pressure will be placed on wheat prices. The July contract may challenge the $4.80 price support. Prices above $5 next Friday, June 25, will indicate that a floor has been established.
 


 

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