Midweek Markets: Don't Be a Deer in the Headlights

July 23, 2014 06:33 AM
Midweek Markets: Don't Be a Deer in the Headlights

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.

Now that prices have dipped below $4 per bu. for corn and are also down big in soybeans and wheat, Steve Georgy with Allendale Inc. has seen firsthand how low prices can freeze some farmers in their tracks when it comes to marketing this year’s crop.

"We know corn, beans and wheat for that matter have broke pretty hard," he says. "Do we continue to stare [at prices] deer-in-headlights, or is there something we should be doing?"

At the very least, growers can watch several issues closely as the season progresses. First, volatility in foreign markets – Ukraine in particular – are worth tracking for potential market impact. Also, the weather forecast obviously matters, he says, with hot temperatures this week potentially affecting pollination in some areas.

"However, without a dramatic shift in weather, it is difficult for bulls to gather any momentum," he adds.

Kevin Van Trump with Farm Direction speculates it will take a big surprise to "stop the bleeding," but urges farmers to use marketing tools at their disposal.

"Producers must keep hedges in place and continue to stay under protective shelter until the bearish storm shows more clear signs of dying down," he says.

Kevin McNew with Grain Hedge and Geograin, says a drying western Corn Belt is worth watching.

"Rains will be needed during August to maintain the crop quality in the western half of the grain belt," he says. "Soybeans and corn in Minnesota, North Dakota, South Dakota and Wisconsin, which received significant precipitation during the earliest parts of the season will be most susceptible to moisture stress due to their shallow rooting."

McNew also addressed the news of two military jets being shot down in Eastern Ukraine this morning, but he says time will tell how instability in that region will affect markets.

"U.S. wheat futures are showing very little interest in the Ukraine story following one day of buying last week," he says. "We will continue to monitor the situation for any changes in the export outlook."

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.

Want more? AgWeb readers are sharing fresh marketing insights every day. Click here to join the conversation, or to start your own.

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