Economist expects more weather-related volatility this year
An ag economist says corn and soybean markets will be more vulnerable to weather-related volatility this year.
Dr. Michael Swanson with Wells Fargo says the short ending stocks heading into the start of planting season create even more uncertainty. “The market is so nervous right now that you can look at the December 2021 contract, you can see that one really jump really quickly if there is any sign that there’s going to be an average or above average crop,” he says. “This is a year both soybeans and corn will be much more fickle and much more weighted toward the panic if it happens.”
He tells Brownfield in a typical year planting delays because of weather or an early frost might move the market a little. But, not this year. “We’re going to expect extraordinary volatility if any of those occur,” he says.
The USDA’s latest supply and demand report has corn ending stocks at just over 1.5 billion bushels and soybeans are pegged at 120 million bushels.
AUDIO: Dr. Michael Swanson, Wells Fargo