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Quiet market week

05/16/2013 @ 2:26pm

This workweek has turned into the first active workweek for Corn Belt farmers, with hit-and-miss activity giving way to widespread planting progress. The goal is clear -- get as much done as possible before the widespread rains roll in.

  

A farmer sitting in a tractor is not very often engaged in thinking about marketing.  As long as his cash bids are not dropping like a rock, there are more important things on his to-do list. However, market information still continues, with increasing emphasis on each weather forecast. Planting progress also attracts attention, although the market continues to struggle with its importance. The lack of a clear link to final crop size means reactions are muted.

    

Tomorrow, however, a jolt of volatility could occur when a widely watched analyst projects acreage during market hours. As the days progress, have many farmers’ plans changed?

    

With December corn futures hugging the lows, a farmer is not receiving any sort of market signal to continue to try to plant corn at all costs. Also, last Friday’s reports didn't contain any real surprises. The supply/demand tables continue to highlight the possibility of the largest carryouts in many years. 

 

Since there has been no reaction to record-slow plantings, the market will need something else to happen to cause the next big move. No news to cause a big move? Then prices could easily drift lower as the market sinks under the weight of much larger supplies.

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The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.