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Grain Markets See First Positive Sign in A While, Analyst Says

Wheat has taken the biggest haircut, since February.

We talked about the likelihood of increased flooding this spring for the past few weeks.

With the current snowmelt in upper Midwest states, it certainly has begun. Iowa, Nebraska, and South Dakota all reported flooding this week, as the heavy snow finally melted on top of already saturated soils, which also happen to be frosted deep into the earth by the winter’s bitter cold temps. 

The ability of the snowmelt to soak into already saturated and frozen soils is just not there.  

Flooding has resulted in record-high water levels in many rivers in many states, and sometimes dangerous situations with icy water and road washouts.  

While the fact that snowmelt occurred about a month earlier than in 2018 is good, we have to get the water to run off and get soils dried out before we can start planting this spring. The warming temps are allowing that to occur at least, with normal to above-normal temps now forecast over much of the Midwest – a stark change from the bitterly cold winter temps.  

U.S. Weather

Weather forecasts are calling for below-normal precip in the U.S. the coming week, and below-normal precip in the western U.S. for the eight- to 14-day forecast. The Eastern and Southern U.S. will see above-normal precip in the eight- to 14 day forecast.  

Temps will average above normal in the western two-thirds of the U.S. the coming two weeks, but below normal in the eastern third. Overall, this drier weather should help to alleviate flooding in the Midwest, especially in South Dakota, Iowa, and Nebraska.  

But warmer weather will bring on snowmelt in northern areas, and that will mean more flooding in Minnesota, North Dakota, and Wisconsin.  

Flooding will likely expand to Minnesota, North Dakota, and Wisconsin in the coming weeks as temps warm and snow melts in these wet states. (Soils were satured from the extremely wet fall.) 

It’s going to be an interesting spring!  But with the warming temps, at least the water will start flowing early so that the flooding will be all done (hopefully) by normal spring planting. If temps warm as forecast, it could bring on spring much earlier than last year’s late start.  

South America’s Weather

South American weather is forecast to have above-normal precip in Brazil, but almost no precip in Argentina in the next 14 days.  That will aid harvest in Argentina, but possibly dry out late-season crops there as well. Temps will be near normal in the next 14 days in SAM.  

The Grain Market

Pro Ag notes that the grain markets reversed higher last week, with 14¢ gains in soybeans/wheat and 9¢ gains in corn for the week – all after reversing the Monday losses in the markets. That is the first positive sign in a while in a market that has sagged recently. 

From February 14 to Monday, March 11, wheat prices had fallen 99¢, soybeans 47¢, and corn 27¢ in less than a month, as China/U.S. trade negotiations were not completed as planned, and it appears no significant agreement is expected in the near term. 

President Trump has recently said we should expect news in a few weeks, but the market seems quite impatient at this time.  

The market and all of agriculture would like to see an agreement on trade with China.  

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Ray can be reached at raygrabanski@progressiveag.com.  

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Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country. 

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