"Weather Risk" How Long Can We Play That Card?
Aug 08, 2013
Weather here in the US remains an important topic of debate for both corn and soybean producers. Just the opposite of last year, producers in many locations are now talking about conditions that have become excessively wet and temps that are abnormally cool. The words "flooding" and "frost" have now replaced "drought" and "record heat" in the bullish vocabulary. What we have to understand is that we will always hear more screaming and hollering from those who are in pain rather than from those who are enjoining more favorable conditions. With that being said, of course there are some spotty areas that are struggling, but more than offsetting those remarks are producers who are quietly talking about the possibility of record corn yields. My point is "weather" risk in the corn market is quickly diminishing. Soybeans however may still have a legitimate weather argument to overcome in the days ahead, especially if we don't start to see more sunny conditions. To get all my comments CLICK HERE for my daily report..
Chinese weather (extreme heat) has become a concern as of late for many traders. From what I have been hearing the problem areas are primarily to the South and East of the main corn and soybean regions. Talk is cotton and rice areas are much more in jeopardy. In fact the epicenter of the "heat wave" is said to be in a region that produces almost 35-40% of China's entire rice crop. The extreme heat in China is certainly something we are monitoring, but as of right now I do not see it tremendously impacting corn or soybean prices.