Grain futures pulled back this week, due to rainfall in South America. However, favorable prices remain.
South American weather remains top of mind, following the January Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports. Matt Bennett, founding partner of AgMarket.Net, is curious to see how weather forecasts will further impact commodity markets.
“Brazil is planting a lot of soybeans, so they’re probably going to come (out) with a pretty big crop either way. Argentina, I think, has had a more rough go of it. You put that all together and you understand that they’re not going to have as big of a crop as what they could have. But at the same time, I think they’re going to have ample supplies. I’ll be interested to see how the market handles this, if we have an issue on the second crop out of South America,” Bennett says.
U.S. grain exports remain solid, as reported by IARN field editor Brent Barnett. Export business will “start to slow because of South America,” according to Bennett.
“This week alone we did about 67 million tons. Not only did we do that, but we saw another surprise announcement this morning. We also saw a surprise announcement yesterday to a couple countries (and) another export for China on the 2020/2021 marketing year,” Bennett says about soybeans.
The latest run up in prices does not seem to have impacted exports, according to Bennett. Additionally, favorable prices remain, even after this week’s profit taking.
“The biggest thing is going to be acreage. I think producers need to continue to plug in these price levels, see what their profit margins look like at those levels and market accordingly,” Bennett says.
