When the planting season was delayed for many farmers, concerns of a frost became more prevalent. Now, it seems the first test is upon crops.
Forecasts for the weekend of Oct. 12 showed the potential for near-freezing temperatures, threatening the crop that hasn’t been harvested in many areas.
But the markets may have already factored this in. Jack Scoville, analyst with the Price Futures Group said the weather might actually be playing second fiddle to some of the other factors that are going on.
“We’ll trade it, but it’s been a well-advertised forecast,” he said. “It certainly has a chance to become a major news story at the end of the week. If the forecasts hold together we’ll be very interested in that.”
With the Supply and Demand report coming out on Oct. 10, Scoville said he expected some choppy trade. The report came out after press time, but Scoville indicated the possibility of a rally if crop estimates are further reduced.
Scoville said the best way to determine if Thursday’s report favored the bears or bulls is to base it on the trade estimates.
“It’s going to be interesting to see how USDA handles this because there is still pretty limited information,” he said. “Harvest is still getting underway in a lot of places. They don’t have much information to use.”
Last week, biofuels made headlines when the EPA and President Donald Trump announced their intention to promote more use of ethanol. However, despite the voiced support, the markets didn’t seem to react much to the news, and Scoville said it has to do with the fact that traders still don’t know what the plan is.
“There was no detail,” he said. “We don’t really know how to handle it. It looks like we are going to try and keep the status quo together and not really expand the use of biofuels. It’s not going to get underway right away.”
Finally, Scoville said some of the dryness in South America could affect the winter corn crop.