The full impact and damage from Hurricane Ida are still unknown. However, shipping delays and damage to grain terminal infrastructure are already creating concerns over just how big of an impact the Hurricane will have on agricultural exports in the days and weeks ahead.
The uncertainty was partially to blame for a major market sell-off Monday. September soybean contract closed 54 cents lower on the day, and September corn finished down nearly 18 cents.
“Fundamentally, I think we can turn to the Gulf of Mexico and Hurricane Ida, and it really did have an impact there,” says Brian Grete, editor of Pro Farmer. “It’s going to take some time to know the full impact, and markets just don’t like uncertainty. We know that at a minimum export situation will be slowed for a little bit. It could be slowed significantly, depending on what kind of damage there is to those loading rigs and those types of things. So, it’s kind of a wait and see.”
The shipping issues caused by Hurricane Ida could have a major impact on the overall export picture. The Port of South Louisiana is a major shipping hub, as it’s the largest grain port in the United States. Grain elevators within the Port handle more than 50% of all U.S. grain exports annually.
Grete says there were other factors that fueled the pressure on prices Monday, and those come on the technical side.
“There are a couple things that impacted the markets Monday,” says Grete. “We got off to a firmer start overnight. So, the overnight trade initially pushed up. And then we had some moving averages, like the 10-day, and 20-day short-term moving averages - which ran out of buyer interest. And from there, prices declined.”
Grete says the funds were heavy sellers to start the week. As the funds exited long positions they held in corn and soybeans, it put even more pressure on prices.
