As the combines get ready to roll in the coming weeks, the grain markets may also generate their own type of rolling movement as well. While it’s tempting to focus all your attention on the upcoming harvest, please continue to monitor the grain markets.
Here are three points to make sure you keep an eye on in the coming weeks.
When looking at the corn, soybean and wheat markets, the world still is dealing with tight supplies of old crop ending stocks. Yet, as harvest approaches, there are hopes of record production by the United States and other Northern Hemisphere countries to help increase global new crop supplies. The hope of larger supplies had been weighing on new crop futures prices into late August.
The truth will be known soon enough if yields will be larger than anticipated, or smaller than expected due to stubborn early summer heat.
From a marketing perspective
Here are three things to monitor during the month of September:
Early harvest yields
Combines will be rolling soon enough, and with as variable as summer temperatures and rain
Soybeans had decent rain and cooler temperatures to start the month of August during the critical pod filling stage, but will the late August heat become a detrimental factor to soybean yields?
There are plenty of geo-political aspects to be watching closely right now. For starters, the world continues to focus on China’s slower than expected economic rebound and this is weighing on market sentiment. The notion is that if their economy is doing poorly, then potentially their citizens may not be in the mood to spend money, especially on products tied to commodities.
Next, we need to continue to monitor the Russian and Ukraine war and how the world responds to the ongoing war as well. Do global leaders step up and take a stand? Will the European Union leaders continue to work together to help get grain out of Ukraine and to the places that need it? Because of the war, will China shift their buying pattern? They had been buying Ukrainian corn, will that shift to the U.S.?
Lastly, China and Russia are said to be pushing to expand membership in the “BRICS”—Brazil, Russia, India, China and South Africa—bloc of emerging economies to counterbalance Western influence. Chinese President Xi Jinping has been promoting the expansion of BRICS to enlarge the bloc since 2017. Keep in mind, the BRICS nations now account for more than a quarter of the global economy and nearly 40% of the world’s population.
Sept. 12 WASDE report
Traders will primarily be eyeing any changes in yield and ending stocks on Sept. 12 World Agricultural Supply and Demand Estimates. The focus will be on new crop demand. Will there be additional reductions to corn export demand? Will the U.S. Department of Agriculture increase demand for U.S. soybean crush? Will the USDA tweak any global production numbers? In some years, the September WASDE report helps to solidify a “harvest low” for the grain markets. Will that be the case for this year?
When looking at the above three things to be aware of for September, these are factors that could have an enormous impact on prices until the end of 2023. Therefore, get your marketing plan ready. Will record crops take place this year or will weather, politics and reports change things? Only time will tell. Have a plan in place, and together, we’ll see what awaits in September.
If you have questions, you can reach Naomi at [email protected] or find her on twitter @naomiblohm.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Reproduction of this information without prior written permission is prohibited. Total Farm Marketing refers to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency and an equal opportunity provider. A customer may have relationships with any of the three companies.
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