Despite heavy rains and virtually no planting in the Eastern Corn Belt last week, the market showed very little market reaction. As Doug Werling from Bower Trading explains, this is because conditions in the Western Corn Belt improved. As we begin a new week, the forecast is much the same: delays in the east and progress in the west. “Areas of Indiana, Illinois, and Missouri will remain wet,” he said. “Areas in the west and the northern plains have 10 days of dry weather and plenty of planting progress. Just the opposite of where we were 2 weeks ago.” He added that the market is unsure about which way to go with cool weather forecast until Mid-May in the east, but dry warm weather in the west and north.
He noted that commodity funds remain short the market and, at this point, do not see farm commodities as a dynamic place to invest, “You saw a lot of investment money this past week flow out of commodities and into equities or global markets. This is another factor that is keeping markets from making any major moves.”
A week ago all the talk was about the big storm in Kansas and the damage it might have done to the wheat crop. Werling says, so far, that damage has not manifested itself, “In the end, I do not think this wheat crop is going to be a good as they say it is because the high yielding areas of Kansas is where the cold and snow occurred, but it may take a while to show up.” He added a rally in wheat this summer may be more likely.
For more Market Strategy advice, contact Bower trading at 1-800-533-8045 or bowertrading.com.
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