Grain market questions galore for 2013
As 2013 gets set to start, let's look ahead. We could spend all day recapping the unbelievable market events of 2012. But, frankly, as someone who writes market information on a daily and sometimes hourly basis, year-round, looking forward sounds more interesting.
The farm markets have a number of questions to find answers for, right in the first few months of the new year. First, the size of the current South American soybean crop is one market factor that will start to get answered in February. With the Brazilian farmers already over half sold on new crop, the export market will have to figure out if Brazil's logistics (truck transportation, shipping port congestion, harvest weather, etc.) will be able to handle a wall of soybeans. Keep in mind, Brazil is expected to produce a record amount of soybeans in 2013. Another market question, yet smaller, is just how much corn will Brazil and Argentina produce and export?
On a back burner, but still on the stove, is this longstanding concern about whether the Black Sea countries can find enough wheat for their own needs and their customers' needs. Whether it be for feed or food, the European countries are flirting with export bans, due to recent droughts.
Everybody -- and I mean everybody -- wants to know what China's economy is going to do in 2013 and beyond. One day you hear it is not going to have a hard landing, and then the next day you hear consumption is down, and yet another day you hear the Chinese government wants to adjust its currency to help exports. I don't know what's next, but the market is eyeing the Asian demand for U.S. soybeans and corn.
And what's the big elephant in the room, regarding a long-term market outlook? Let me spell it for you: W-E-A-T-H-E-R. Will the U.S. Midwest get ample soil moisture, by spring, to get farmers' fields ready to plant the 2013 crop? And even before that: The market wants to know if enough snowmelt will flow into the Missouri River to help the extreme low flows on the Mississippi River?
I'm sure it's not much different than other years, but it seems there is no shortage of market-related questions to kick off 2013.