Grain markets ignoring dry forecast, trending lower
An ag economist says commodity markets are trading in the opposite direction of weather fundamentals.
The University of Missouri’s Ben Brown says traders locking in profits and farmers delivering ample grain is driving down the market despite extended weather outlooks trending dryer.
“That’s maybe not surprising, given that we have high costs and people are trying to protect revenue given that there’s higher costs this year than what we’ve seen,” he said.
And he tells Brownfield early season crop conditions, especially corn, are generally positive, lowering the impact of potential drought.
“The old adage is knee high by the fourth of July,” Brown said. “Shoot, we’re going to have some corn that’s shoulder high, if not head high by the fourth of July, for people that got it in early.”
Brown says even if drought conditions move eastward from the plains, the extended planting season means corn will be pollinating at different times across the country…
“It’s going to depend on weather on different weeks.” Brown said. “And so, therefore, a period of time where we would normally see dryness and drought impact the markets or get the markets antsy, I don’t think is going to play as big of a role this year.”
Brown made his comments on Brownfield’s recent Weekly Commodity Market Update.