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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.


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. 

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