The calendar and the crop reports are the big items in today’s grain market situation.
This time of year is all about acreage, says Don Roose, president of U.S. Commodities in West Des Moines. Planting season is done for most farmers and most of the crop was planted. That means traders are now starting to look away from planting progress and to instead look at crop conditions and yield and risk.
There is demand for grain in the world, and while supplies are certainly adequate, a short crop in 2022 would lead to a reduction in world supplies.
“It appears we have to get a good yield,” Roose says.
People are also reading…
Because of those weather and calendar progressions, traders will be looking closely at the June 30 acreage report from the USDA. They will also be keeping a close watch on stocks of grain on hand throughout the summer.
“There is no real shortage of grain today,” Roose says. “But if there are yield problems supplies will tighten again.”
There are, of course, other factors in the market. The war in Ukraine continues to be a concern, and that war, combined with other supply chain issues, could lead to serious problems in some parts of the world that have depended heavily on getting grain from Ukraine or Russia.
There are also continued concerns about weather in the United States. Pollination is happening already for the corn crop in the southern United States. A heat wave right now could hurt pollination, so analysts are watching that situation.
Planting was delayed in parts of the Midwest, and that is a concern, as is the chance for poor weather impacting yields in the areas that were planted on time. Weather may also have impacted weed control or fertilization or other field work in the areas that have been planted.
Still, the crop is planted and supplies are not short, and Roose says that while rallies are possible or even likely, there is likely to be downward pressure on the market as the growing season advances.