Traders are in the middle of a tumultuous time in the markets.

From the partial government shutdown which ended Jan. 25 to trade talks between the U.S. and China, there was a lot of uncertainty this past week, and headlines and rumors can make things volatile.

As government reports start to funnel back into the market cycle, one of the only certain things farmers can keep an eye on is the weather in South America.

“What we’ve got right now is a lot of expectation of what is to come,” said Jeff Peterson, president of Heartland Farm Partners. “Right now, if we think about the bean market, what we are factoring in is South American weather. Currently, what we have factored in is a little bit of a threat. They haven’t had as much rain as they would like to have had. As a result, we’ve seen yields continue to drift back.”

On Jan. 30-31, the U.S. and China met in Washington, D.C., to continue working toward a trade deal. While no deal has been struck yet, there appears to be optimism, with recent purchases of U.S. soybeans coming through export sales reports.

However, if and when a new deal is agreed upon, Peterson said it might not affect much, especially right away.

“Overall, our concern we have on the trade talks side is that the trade may actually be expecting too much to come out of it,” Peterson said. “We are talking about some very tough issues that haven’t been dealt with in a long time with China. The fixing of the trade deficit is very easy. If China wants to buy more, they can do that easily.”

The longest-ever partial government shutdown is in the rearview, but the agreement that ended it could lead to another shutdown starting Feb. 15. This would again put needed government reports in question, as traders were flying blind during the initial 35-day shutdown.

“From the trader side, (the shutdown) probably caused them not to take as big of positions and not extend themselves as much because what they had to rely on was the technicals,” Peterson said. “They had to watch those markets and watch those local basis levels to see whether or not there’s been sales made that might not have shown up.”

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