Grain markets could also generate their own kind of rolling activity as the combines get ready to run in the coming weeks. While it is 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 out for in the coming weeks.
What has happened
Looking at the corn, soybean and wheat markets, the world is still grappling with a tight supply of old crop ending stocks. Nevertheless, as harvest approaches, record production by the United States and other Northern Hemisphere countries is expected to help increase global new crop supplies. Expectations of a larger supply were putting pressure on new crop futures prices in late August.
The truth will soon be known whether yields will be higher than anticipated or lower than expected due to early summer heat.
from a marketing perspective
Here are three things to watch out for during the month of September:
early crop yield
Combines will soon be operational, and as summer temperatures and rainfall are likely to be variable, yields will also be variable and inconsistent. Tip backs on ears of corn were a hot topic on social media this summer.
There were good rains and cool temperatures in early August during the critical pod filling phase of soybeans, but will the late August heat turn out to be a detrimental factor for soybean yields?
Right now many geopolitical aspects have to be closely monitored. For starters, the world’s focus is on China’s slower than expected economic growth and this is weighing on market sentiment. The assumption is that if their economy is performing poorly, their citizens may not be in the mood to spend money, especially on commodity products.
Next, we need to continue monitoring the Russian and Ukraine war as well as how the world reacts to the ongoing war. Do world leaders come forward and take a stand? Will EU leaders continue to work together to help get grain from Ukraine to where it is needed? Will China change its buying pattern because of the war? They were buying Ukrainian corn, will it move to the US?
Finally, China and Russia are said to be pushing for increased membership in the “BRICS” grouping of emerging economies – Brazil, Russia, India, China and South Africa – to counterbalance Western influence. Chinese President Xi Jinping has been promoting the expansion of BRICS since 2017 to make it bigger. Bear in mind, the BRICS nations now account for more than a quarter of the global economy and about 40% of the world’s population.
Sept 12 WASDE Report
Traders will primarily be eyeing the World Agricultural Supply and Demand Estimates for September 12 for any changes in yields and ending stocks. The focus will remain on the demand for the new crop. Will there be further reduction in export demand for maize? Will the US Department of Agriculture Increase Demand for US Soybean Crush? Will the USDA change any global production numbers? In some years, the September WASDE report helps cement a “harvest low” for grain markets. Will it be the same this year as well?
While looking at the above three things to be aware of for September, these are the factors that can have a huge impact on the prices by the end of 2023. So, get your marketing plan ready. Will there be record crops this year or will weather, politics and reports change things? only time will tell. Make a plan and together we’ll see what’s to come in September.
If you have any questions, you can contact Naomi [email protected] Or find her on Twitter @naomiblohm.
Futures and options trading involves significant risk of loss and may not be suitable for everyone. Therefore, consider carefully whether such trading is suitable for you given your financial situation. Reproduction of this information is prohibited without prior written permission. Total Farm Marketing refers to Stewart-Peterson Group Inc., Stewart-Peterson Inc. And SP is from 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 the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency and equal opportunity provider. A customer can have a relationship with any one of the three companies.
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