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Farm Commodities Go On Sale

The wind is blowing from a different direction today! A continuing decline in bean exports, better weather forecasts, and a healthy dose of profit taking have ganged up on the markets and sent them lower. It has been awhile since the market has experienced such large down moves. 

This is a sharp contrast to earlier in the week, when slow corn planting and constant rain caused prices to rally.  Monday and Tuesday, there was also a resurgence in talk about increasing old-crop demand for both corn and soybeans. 

Meanwhile, nothing really changes in the wheat market. The forecast is dry and the crop in Kansas, Oklahoma, and Texas is a disaster. The Oklahoma crop, for example, was estimated at 66.5 billion bushels this week. Last year’s crop, also hurt by drought, was 105.4 million bushels. The hard red winter wheat crop gets smaller each day. 

Next week’s planting progress numbers are expected to be slow, given the rainfall of the week. However, the weather forecast is looking like there will be several dry days, and the market is already trying to consider what the numbers will be in two to three weeks. 

The WASDE (supply/demand report) next Friday, May 9, will also attract attention as it will be the first time 2014-2015 supply/demand tables will appear. So much can change during the crop year, yet market participants will form opinions and make trades based on this report. 

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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