Grain markets rebalanced heading into the long Presidents Day weekend amid trade uncertainty over weather in South America and questions about the economic and political atmosphere in the U.S., says Jerry Gulke, president of the Gulke Group.
“Weather is still rather uncertain in Argentina, though it looks like we’re probably very close to where we can’t hurt those crops in South America very much, even with additional rain,” Gulke tells “Weekend Market Report” host Pam Fretwell for an episode airing Saturday, Feb. 18, 2017.
Some liquidation has occurred, suggesting the soybean market is siphoning off the weather premium for soybeans, in particular.
“It looks like rebalancing and reinvestment of positions by traders who are trading weather and going into a three-day weekend where we all know things can change,” Gulke explains. “Weather is hardly predictable in five days, let alone in seven days. There’s an old trading axiom that says, ‘When in doubt, get out.’ There’s a lot of uncertainty weather-wise. The economic and political atmosphere is still up in the air regarding our trade situation. That makes people uneasy.”
One bright spot: Livestock prices remain firm across all sectors on the backs of very good exports, Gulke says.