Weather is always on the minds of farmers and analysists, especially as planting season draws closer. According to Michael Clark, meteorologist with BAMwx.com, drier weather is in store until at least April, and that risk could remain into spring and summer.
Kansas, Oklahoma and Texas are seeing some drought problems, as reflected in the latest U.S. Drought Monitor, that are impacting the winter wheat crop that is ready to shake dormancy. Clark said this drought has the possibility to spread.
How far that drought could spread is still in question. During the U.S. Farm Report roundtable taping at the CHS Ag Services Ag Industry Day in Grand Forks, North Dakota this week, Elaine Kub, author of Mastering the Grain Markets, said a drought in the Peace Garden State would “drastically change things.”
“There’s no expectation of a widespread drought in the center of the Corn Belt,” she said. Kub expects the drought in western South Dakota to remain for a third year, but she doesn’t think it’s “appropriate” to get bullish about corn and soybeans at this time.
DuWayne Bosse of Bolt Marketing LLC says 9 out of 10 drought or weather scares are selling opportunities, just like the current market situation we’re experiencing.
As a farmer and marketer, he admits he makes some of the same mistakes marketing his grain as most farmers do, but if farmers stick to their marketing plans, they can do well. Before the taping, he told his clients buy short-dated put options, or a put that goes off new crop futures and expires every month.
Hear why Kub thinks soybeans could see a correction in the near term, and why she thinks the soybean picture could be bullish in the near term on U.S. Farm Report above.