Overview of Summer Markets

Overview of Summer Markets

I’m KayDee Gilkey with the Market Line Report for Sept. 4, 2012. 

The commodity markets were closed yesterday for the Labor Day holiday, so today we visit with Mike Kruger, President of MK Commodities.

Kruger: “Well let’s begin in the spring, when we had the USDA projecting the  highest largest corn acreage since before WWII. The market is all bearish about it, not many weather problems in the world and end-users feeing like they had the cow by the tail. Until we entered the summer and the weather turned very adverse,in the corn belt in particular and stayed adverse. We’ve shriveled the crop up significantly and a lot of debate about just how small it is. We are looking at an extremely tight situation that absolutely forces demand rationing. We can’t grow world usage like we normally do and have enough when we are done.”

So here we are in early September, what is the story on wheat?

Kruger: “Wheat which comes into all of this relatively looser than corn. Is as a result being fed licketee brindle around the world. Here we are close to nine dollars for white wheat and it is competitive for feeds --- a remarkable thing. So our major big questions from here are final production levels, and does demand really shrivel up in total this year or not. What does it take to ration the demand for wheat? How much wheat is fed to substitute for corn?”

I’m KayDee Gilkey with the Market Line Report on the Northwest Ag Information Network.