Wheat's Big Picture Outlook

Wheat's Big Picture Outlook

I'm KayDee Gilkey with the Market Line Report for November 28, 2014.

The markets were closed Thursday for the Thanksgiving Holiday. So there are no new market prices to report, rather we will check in with Jackson Commodities Henry Kornegay what is happening big picture with the wheat market.

Kornegay: "Well as we finished harvest in September, the markets were looking at near record production in stocks in the world. This contributed to most of the price decline we've saw in the summer and into late September. Since then, there have been reports that Ukraine wheat was in poor condition going into winter making it susceptible to winter kill. There has also been some dryness in Australia causing the crop to be in poor condition. Additionally cold winter weather in the Mid-West caused some damage to crops early on. And despite a lack of demand, the prices have been continuing to rise since September and we are thinking that these are some of the reasons for the changes you see here."

Kornegay shares a recent report of decrease grain acres in the United States.

Kornegay: "The Congressional Budget Office trimmed soybean planted acre for next year 2 million acres. Corn was trimmed 900,000 acres and wheat 800,000 acres. So this just leaves us with the question as to what producers are going to do with these acres they are not planting for next year?"

He adds that with 2014 decrease in grain market prices, USDA is predicting that 2014 farm income will be down 21 percent from the previous year and at the lowest since 2010.

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