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A marketing waiting game

The next week will be a strange one for grains and soybeans, as the market waits for the major USDA reports on Friday, June 28. On the one hand, prices could be influenced by the next batch of weather forecasts. On the other hand, the market may not be comfortable with large moves before the reports. It could be a choppy affair.  

This week’s warmer and drier weather has allowed many farmers to plant the last of their soybeans, except for double-crop beans. The warmth and sunshine also have improved crop conditions, and this should be reflected in Monday’s ratings.  

On the demand side, exports have been a quiet affair this week (and for many past weeks). World buyers of corn have gotten quite used to purchasing from countries other than the U.S. Even strong traditional buyers like Japan turn out to be price-sensitive. To increase export demand, U.S. corn will need to be much more price competitive with Ukrainian corn, for example.  

Also this week, there were a few estimates of crop acreage, including one prominent firm that released numbers on Wednesday. The shifts in acreage were probably not as big as many were thinking. Does this reduce the market’s anxiety?  

One thing sure to do the opposite — that is, increase anxiety — is a shift in the weather forecast. That’s pretty much what happened on Wednesday, too, when traders were confronted with a hot/dry forecast for longer than three to four days. Plus, the market became aware as the day progressed that it was exactly one year ago when the market began its move higher in 2012.  

Watch for prereport estimates next week. Having a handle on what the market is anticipating will make it easier to figure out Friday’s market reactions.    

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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