Sorghum is out pricing corn in parts of the US. Oklahoma State University Grain Marketing Specialist Dr. Kim Anderson said this is true much of the state. He said if you are anywhere outside of the panhandle sorghum is being priced higher than corn. In the Oklahoma panhandle, corn prices remain slightly higher than sorghum. In this weekend’s edition of SUNUP, Anderson addresses why this is taking place.
Anderson said the higher price for sorghum can be attributed to increased demand from China. He said the Chinese government has put a tariff on corn, which has made importing corn more expensive. He said this is an effort to protect the farmers and corn prices in China. With no tariff on sorghum, Chinese feed millers are buying US sorghum and shipping it in. Anderson said central Oklahoma has access to transportation to ship it to the Gulf of Mexico for export, so sorghum is getting a higher price. He said in the panhandle transportation costs to the Gulf are higher, plus feedlots prefer feeding corn over sorghum, so corn remains at a higher price.
In looking at the commodity market, wheat has a good run up in prices. On November 10th cash prices in Oklahoma were at $5.45. On December 1, prices peaked at $6.33. Since then prices have backed down to $6.12. On the futures market, Anderson said wheat prices have gone through the resistance levels of $6 and $6.20. The March 2015 Kansas City wheat contract has gotten above $6.60. He said these higher prices can be attributed to lower transportation costs and a ten cent increase in basis. He said the funds were short on wheat, so they got out of those short contracts. There are several global factors going on with Russia possibly not exporting high quality wheat, low quality wheat coming out of the European Union, lower wheat production coming from Australia. Anderson said that’s making our high quality and higher protein US wheat more valuable.
In looking at this latest price rally, Anderson said it’s a perfect opportunity to sell 2014 wheat and he also recommends farmers consider pricing some of their 2015 crop. He is forecasting June 2015 Kansas City wheat price to be around $5.50/bushel, so farmers may also want to consider buying a put option contract. He said you can a minimum price around $5.60, so that is something else to consider right now.
(Source – http://www.farms.com/news/sorghum-commanding-higher-price-than-corn-84901.aspx.)