Conflicting market news, uncertain markets

It’s easier for market writers to be reporters than it is to be commentators and analysts. Fragmented news continues to surface, but understanding market direction based on that news is difficult at best.

A recent USDA report on the corn market reaction is one example. Projected corn reported in the March 31st cropping report There was considerable bear news in his acre increase, but a bit more bull news from the report of a slight decline in grain stocks. I was.

USDA expects corn to grow by 3.4 million acres. However, the market opened with a week of high corn prices, then lost its gains and increased losses as the week progressed.

I wonder what the traders were thinking as the price corrections from the reports are usually over in a day. By the end of the week they thought corn was too expensive and lost 6.43 1/2 dollars of 17 cents on old corn and nearly 10 cents on new crop corn that week to 5.56 3/4. rice field.

Soybean news was mildly bullish and bullish. So soybean stocks on hand were slightly lower than expected and acres were lower than expected but about the same as last year. In this case, the market rose like corn during the week and then fell.

But another piece of news yielded the same results. Soybeans fell 13 cents to $14.92 1/4 in his May delivery. Futures for November saw him lose a dime to 13.09 3/4.

wheat

May Chicago wheat futures fell 17 cents in a week. This is because the whole SRW crop seems to be coming out of winter at its best for a long time. This contrasts with hard red winter crops that struggle in the low-lying plains.

The market makes some sense, at least for wheat, but it’s hard to see how Ukraine’s turmoil could make it cheaper than it was before lowering export expectations.

Exports by Russians off the Black Sea in ports stolen from Ukraine in the past few years, and exports from Russian export facilities, have changed controls, as 15% of exports controlled by three multinational grain companies have changed controls. We have seen a change this week.

As I said last week, Cargill, Viterra and Louis-Dreyfus have exited the market. They had a joint venture agreement and the Russian government seems to have kicked them out. Perhaps they will still move, but only Russian companies.

planting

This is the time to start focusing on your planting progress. I saw his first USDA report on April 10th and was not surprised. Major states have made little or no progress. For example, we’re hearing progress on irrigated land in southern Illinois and Nebraska. Many regions will be in the 80’s for a few days, so we may see some progress by the end of the week.

In some cases, early planting is primarily a matter of soybeans. This is due to the tendency towards early planting and individual farmers with sufficient support to plant corn and soybeans at the same time. The thought of planting beans in April still ticks my mind, let alone early April. It’s tougher than I thought.

It is doubtful whether there will be much early planting in major areas. This morning we heard reports that the snow was still melting in southern Minnesota and that he had 2-3 feet of snow left in Dakota. The best we can hope for is during our normal planting period, but it could be later in the Dakota as more acres are expected and a delayed start is expected due to snow.

currency change

We hear more and more about the possible change from the US dollar to the Chinese yuan as the world’s “reserve” currency. I didn’t take Economics 509 or anything, but this is all about the fact that we have had the dominant currency in the world for decades.

This means that other countries trade with us based on our currency. This tends to mean hoarding our dollars for other countries to use in trade, making our dollars more valuable. Negative for grain export prices. You can sell your goods more easily with cheaper dollars.

However, much of the direct input, such as fertilizers, comes from overseas. They go high on cheap dollars. Adding indirect inputs favors the stronger currency.

Moreover, some commentators have warned about the date when the renminbi will take over. Once thought that would never happen, Saudi Arabia now trades in yuan and France is talking about it. Wow! who thunked

Farmers will have to rack their brains over their marketing plans for the coming months. We tend to be so absorbed in production that we neglect even thinking about marketing.

We’ve seen a lot of volatility and the calendar shows events that can change prices dramatically. May soybean futures have been in the 85 cents range for the past two weeks. The May range for corn futures was almost 30 cents. Nearby bean futures dipped below $15 and the new crop dropped him to $12.50 just a few days ago.

Highs came and went last summer. It remains to be seen if rice planting weather will pick up this spring, or if the USDA balance sheets for both corn and soybeans will be perceived to be tight.