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What to Know This Week: Weather Down, Markets Up
It's planting season in the Corn Belt, yes. But, Mother Nature's not being the most cooperative partner in the dance toward the establishment of the 2014 corn and soybean crops. And, it's not much better in wheat country. See the latest here!
Many farmers started this week looking out on fields of white. After a weekend of rain throughout the nation's center (except where it was most needed in the Plains), snow fell late Sunday, ushering in what's been a week of cool, damp conditions at a bad time for farmers itching to plant corn.
The rain wasn't a bad thing everywhere, though. It was even a "gift from above" for some. But, the same system that brought that rain also brought freezing temperatures at about the worst time of the year possible for Plains wheat farmers.
And, as Mother Nature continues misbehaving, the market is watching. "with the weather so awful for spring planting it appears that grain prices are still set to go higher," Agriculture.com Market Analyst Ray Grabanski said this week.
A wheat tour this week showed just how much damage that crop could be incurring. "In Kansas, about two-thirds of the crop had reached the pivotal jointing stage of growth when many areas were hit by the freeze," writes Agriculture.com's Bill Spiegel this week.
Then came confirmation Thursday from the U.S. Drought Monitor that while some areas are seeing real benefit to the recent rain, other areas remain severely moisture-deficient. The outlook's not the greatest for a reversal of these trends in the next week, forecasters say.
And, while these weather woes continue in many parts of the country between the Rocky and Allegheny mountains, traders in the corn, soybean and wheat pits in Chicago are taking note. Weather's front-and-center at the CME Group right now, and that'll likely continue for a while, says Agriculture.com analyst and trader Scott Shellady.
But, the weather's not been the only factor behind higher grain markets in the last week. Earlier this week, soybean futures skied past the $15/bushel mark on news that there's a lot of demand for the U.S. oilseed right now.
In other news this week, the federal government announced in the last week that while overall farm debt has risen in the last 2 decades, average debt-to-asset ratios for most farms have gone down. So, too, has the number of farms that are "highly leveraged," according to the USDA-ERS report.
The grain markets have trended mostly higher this week thanks in part to poor planting weather in the Midwest. How long will it continue?