Midweek Markets: Rain Makes Grain – or Pain

June 25, 2014 02:59 AM
 
storm lightening bolt

Change is constant – and complex – in today’s commodity future’s markets. Grain market experts scour the globe looking for any insights to gain a competitive edge. Here is sample of what some of them have been saying this week.

"The next person who says, ‘Rain makes grain,’ I’m going to punch in the face," lamented one farmer on Twitter earlier this week. But despite heavy rains negatively impacting some fields, Kevin McNew with Grain Hedge and Geograin says the overall benefits to a wet spring are still a bearish factor over the market.

"Acreage numbers from the USDA will set the tone for prices moving forward, with some analysts feeling an acreage approaching 82 million acres is possible," he says. "Considering current prices, we feel it is a good time to forward price or protect with futures/options a portion of expected production."

In corn, Kevin Van Trump with Farm Direction says China still holds the key to potential higher prices.

"For the past several years this market has had an unspoken fear of potentially huge Chinese corn demand at any given moment," he says. "In other words, there has always been a bullish wild-card in the deck in regard to Chinese demand. Traders just never knew if China was going to make the jump from "price" buyer to "quantity" buyer, similar to what we witnessed in the soybean market."

However, rumor has it that China is sitting on much larger domestic stocks than the trade had been estimating, Van Trump adds.

Weak wheat? Dan Hueber with the Hueber report says don’t expect any strong prices for the rest of June.

"I continue to look for spot futures to reach down to the gap targets between 5.67 and 5.62," he says. "While there is certainly nothing that says prices have to quit going lower, particularly with the competitive world trade right now but we have been pressing prices on that news for a number of weeks now and I continue to believe we should soon be in line for a corrective bounce."

Market Rally, a podcast featuring Pro Farmer’s Chip Flory, breaks down market highlights each afternoon when the markets close. Market Rally broadcasts to these affiliates, so you can listen live starting at 2:06 CST. Or, catch up anytime online at http://www.agweb.com/multimedia/market_rally/podcast.aspx.

The AgWeb discussion boards continue to be a farmer-led wealth of information. Ask questions, answer questions, offer opinions or just follow along.

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