MarketsFarm — The Chicago Board of Trade is carefully watching the prolonged trade drama between the U.S. and China and waiting to see if the two countries will reach an agreement in days to come.
“Headlines are leading trade,” remarked Steve Georgy, president of Allendale Inc. at McHenry, Il.
“Markets are revolving around China talk, whether or not we’ll see tariffs starting on Friday, and what kind of situation we’ll see,” he said.
The prolonged lack of trade is weighing on markets as well as farmers, many of whom are anxious for direction.
“There needs to be a deal,” said Georgy. “Farmers are angry right now. If prices continue to go down, what’s the incentive to plant?”
Wet spring weather across most of the U.S. Midwest is significantly delaying planting, causing further frustration. Georgy expects the next planting progress report on Monday to confirm further delays to planting.
“The American farmer is amazing,” said Georgy. “When given the opportunity to get the crop in the ground, it doesn’t take long.”
Georgy surmised U.S. producers may be opting to put more acres in the prevented planting program, as delays creep closer to their crop insurance cutoff dates.
“In 2011 we saw 8.5 million acres that didn’t get planted, so that needs to get off the balance sheet,” he said.
Despite a tumultuous spring, corn and soybean numbers are still high.
“The expectation of close to 2.1 billion (bushels) carryout for corn isn’t tight, and close to 900 million (bushels) for beans is massive,” said Georgy.
“We’ll still have an oversupply issue if those numbers are correct.”
— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.