MarketsFarm — This spring’s weather and flooding in the United States have become the main focus for traders at the Chicago Board of Trade (CBOT), said an analyst.
“What kind of planting conditions, how much rain, how much flooding, and how cold things are,” listed Steve Georgy, president of Allendale Inc. at McHenry, Ill.
The markets have largely finished reacting to the planting prospects and grain stocks quarterly reports issued last week by the U.S. Department of Agriculture (USDA), he said.
With moderate to major flooding in almost 30 U.S. states, farmers who are faced with a curtailed growing season could switch their planting intentions from corn to soybeans, Georgy said.
He also lamented the pace of U.S. wheat sales, which are behind USDA’s weekly pace.
“We’re still not selling as much as we should,” Georgy said, noting that fact could leave a larger than anticipated carryover.
The amount of wheat acres planted in the U.S. might be affected this year, largely by the heavy snow pack in a number of states, such as North Dakota and South Dakota, he said.
But the planting intentions of Canadian farmers have also become a bit of a factor. Reports have stated Canadian farmers could switch from planting canola to wheat because of the ongoing Canada/China dispute.
As for U.S./China trade talks, which started Wednesday, he said no one is expecting a final deal to be reached this week. Rather, the markets will look for the amount of progress that has been made and how close the situation is to a final deal.
The South American soybean and corn harvest will have a growing impact on CBOT, Georgy said — especially with a good-sized corn crop in Argentina, and large soybean crop in Brazil, despite it being smaller than initially forecast.
— Glen Hallick writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.