Will Cold Weather Put a Chill on the Markets?

January 6, 2014 11:35 PM
Will Cold Weather Put a Chill on the Markets?

Can plunging temperatures give some much-needed support to the grain and livestock markets?

Freezing temperatures tested record lows in many parts of the U.S. on Sunday and Monday. How will this weather shock affect prices?

This type of weather can have good and bad effects on the markets, says Jerry Gulke, president of the Gulke Group. He says cold temperatures typically require livestock producers to feed more corn to put the right amount of weight gain on their animals.

"This extra feeding should disappear more corn," he says. "But, I’m not so sure we can feed enough animals in the short-run to reduce our carryover."

Gulke visit with Pam Fretwell, on Straight from the Heartland:

Another impact of freezing weather is river transportation. "It has been awhile since we’ve froze rivers," Gulke says. "There’s a good chance the Illinois and Mississippi rivers might get closed down. That normally has a negative impact." He says prices typically decrease because elevators and other sellers of grain can’t move product out of their facilities.

Kevin McNew, president of Grain Hedge and Geograin, says has been hearing the same transportation concerns and reports countless cash grain elevators are closed on Monday due to the extreme cold.

"Cash traders report that Midwest river conditions continue to decline," he says. "Low water on St. Louis and icing on the Illinois River is raising concerns about grain movements this coming week."

For More Information
Check current market prices in AgWeb's Market Center.

Read and listen to more insights from Jerry Gulke in AgWeb's Market Weekly.

Read Kevin McNew's blog: Cash Grain Insights


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