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Three BIG Factors to Watch As You Hit the Fields

As the calendar turns to April and planters begin to roll, many will be swept up in the “planted acres” chit-chat. Ignore it. All you need to know is that demand for U.S. corn and beans is at record levels. No matter which way you slice the acreage chat, if yields come in below trendline, we’ll have a price rally this summer.

Here are the THREE BIG FACTORS you need to pay attention to:

  1. Weather during critical growth stages. I cannot emphasize enough how we are always one crop failure away from a price rally thanks to the insatiable demand for our crops! 
  2. Funds traders since they love a good weather rally, which of course times often with the seasonal tendencies for grain market prices to rally during the late spring/early summer time frame. WATCH their weekly and daily positions. Know if they are approaching a “historical peak” in terms of contracts they are long. They’ll play the weather rally, but if there is rain on the radar over July 4, they will take their ball and go home. So will prices.
  3. Geopolitical drama is something that needs to be monitored daily. Frankly, I’m watching that more than the weather. It matters what Trump, Putin, Jinping, and Jong-un are thinking and doing. Remember Brexit last June? Yeah – that was 50¢ off the price of corn in one week.

Every day. You need to watch these three factors every day. At any time the items above can twist, turn, and provide for one heck of a price move. Be prepared for the scenario of the three things above to turn bullish, and be prepared for a possible scenario for all three to turn bearish. Obviously, we have no control over any of these factors, but we can control our risk management by being ready through scenario planning and keeping a close eye on weather, funds traders, and geopolitical drama. If you need more information or just don’t have the time to watch these things daily, give me a call. We are here to help with whatever the market may throw your way.

If you have questions, you can reach Naomi at nblohm@stewart-peterson.com.

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