Between the weather, delayed planting, and USDA’s hotly debated upcoming acreage reports, farmers need to prepare for some “tricky” times in the grain market, according to analyst Doug Werling of Bower Trading.
“It’s going to be tricky here over the next few days,” said Werling, speaking on U.S. Farm Report on Saturday. “You’re going to see volatility increase, simply because we’re coming into a crop report, and the weather is going to continue to drive these markets. If this rain shuts off after 10 days and then we go into a more normal weather pattern, markets are going to have a hard time with that.”
Listen to the discussion on U.S. Farm Report:
For farmers who have been dealing rain-soaked fields for weeks, it’s about time that the markets started to pay attention to the weather and gave grain prices a boost.
“What you’re really looking at is a market that really was not poised for a weather market rally,” said Don Roose of U.S. Commodities, also speaking on U.S. Farm Report on Saturday. “We were record short on corn, soybeans and wheat. Really, it was farmers versus the funds: funds short, farmers long, and what really happened was the weather came to life (and) pushed us up to normal, historical levels on a rally.”
But he also noted that weather was not the only factor involved in recent price jumps.
“You have to remember that the average nervous weather market rally is 70 cents to a dollar. We’re over a dollar rally right now,” Roose said. “The other thing you have to remember is that we are talking about the supply side. As soon as we stall out here, we’re going to be talking about demand. South America is big competition, and that means lower exports on corn and soybeans.”
All those questions pushed futures for December corn rise to $4.08 and July soybeans to $10.085 as of midday.
Is it time to make some sales? Perhaps. “From a producer’s standpoint, you really have to view this as a risk management opportunity, because historically when you put the peak nervousness in a market right at the very top, so I think we’re already dialing in a lot of awfully bullish news, but just how much is going to be key, with the weather, going forward,” Roose said.
Others disagree. “It’s time that maybe we sit back a little longer and wait for some of these reports that are coming up to see what they say,” Jerry Gulke, president of the Gulke Group, said on Farm Journal Radio on Friday. “The market is not getting bigger on the supply. It may take us until next January to find out exactly how much corn and soybeans we have.”
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