Demand news for U.S. corn and soybeans has quieted recently. China has been very active, but they do appear to be over on the sidelines right now, although plenty of booked sales are still waiting to be shipped.
But, Ben Kasch with Bower Trading in Lafayette, Indiana says this is a usual time of year for demand of U.S. commodities to drop off.
“You’ll see that South American production start to hit the pipeline, particularly Brazil’s early corn and soybeans, so it is typical to see our exports begin to slip a little bit at this time of year,” Kasch said.
Even though sales announcements and market news have tapered off, Kasch still looks for volatility.
“You’ll see some type of acreage battle on the new crop contracts, but overall, it gets a little quiet here from April into May. Then we get a little more fired up to see how planting progress goes. As far as U.S. news, it’s typically pretty quiet. Now this year, I think we’re going to continue to see a lot of volatility with a lot tighter stock situation in the U.S. You look at USDA’s Ag Forum numbers from February, they had 90 million acres of soybeans to be planted but they still have a carryout number of 140. 140 million bushels is substantially more acreage than a year ago, so there is no room for any kind of weather adversity because it’s razor-thin as far as weather adversity goes here.”
He says weather is the number one market mover early in the year, but “once again we have a very tight stock situation here and no room for any kind of adverse weather. One thing we did see this past fall was a lot of fieldwork getting done, so we are farther along as far as that goes just due to the dry conditions in the U.S., but weather is key here. Argentina is also very important for the weather right now. This is where they add the bushels, add the yield, so that needs to be closely watched.”
Kasch says the market will continue to watch whether forecasted rains materialize there and keep that crop hanging on.
Source: NAFB News Service