Grain markets continue to react to weather-related events.
A commodities broker shares his thoughts on the situation.
Severe flooding quickly impacted Midwest crop producers. Greg McBride, commodities broker with Allendale, says grain markets weigh damage to fields and analysts look towards potential planting delays.
“We’re down a little bit today (Monday). That could be a little technical correction off of what we had last week. But as we get closer to April and guys start itching to start those tractors and do some fieldwork here, the tough part is going to be, ‘Are the fields fit?,’” McBride asks. “We’ve been pretty saturated across the entire Midwest. The next two weeks, with it being a little dry, might take premium out. As we turn the page to April – if the rains are there, we’re hopefully going to see some premium built back into these markets.”
McBride also sheds light on rumors, coming from China.
“The story this (Monday) morning from China is that a meeting between Trump and Xi is going to place in June rather than what we had originally heard, in April. It’s a little further than what we were thinking. “Unfortunately, we did see the market take a little bit of a hit on that news,” McBride said. “It’ll be interesting to see if we can get some tangible news out of them as far as what they’re planning on buying once we get a deal in place.
United States farmers and ranchers long for a deal between the world’s two largest economies. However, Chinese demand looks to diminish with the African Swine Fever (ASF) virus running rampant.
“The hog herd in China had been reduced by 13-percent in January, and another 16.6-percent in February. That will take away bean demand, which won’t bode well with us once we get a deal. Naturally, they won’t need as many beans to feed a smaller herd,” McBride said. “That could change as they ramp back up, but that’s not going to happen in the immediate future.”