Uncertainty has become the norm for the grain markets this winter, as one government shutdown barely ended before another was threatened and trade war deadlines seem to always loom.
As a result, February is a time of trying to grab small victories and weather the winter doldrums.
“We’re still in a trading range,” says Don Roose, president of U.S. Commodities in West Des Moines. “We are probably at the bottom end of that range in corn and at the middle in soybeans, but we haven’t moved out of those ranges.”
Although there are numerous variables facing the market, Roose says, it looks unlikely at the moment that any of them will push the corn or bean markets outside of their trading ranges so farmers need to adjust accordingly.
If there has been any real sign of opportunity in recent weeks, it has been that the basis has been strong for corn and that has opened some marketing opportunities. The knowledgeable marketer can re-own some corn and use market tools to find opportunities in the market.
Still, most of the news has been less than exciting.
The United States remains locked in a trade war with China. The so-called 90-day truce in that war is set to expire March 1, but traders remain hopeful that neither side will immediately raise tariffs or escalate on that date. There have been some rumors that President Donald Trump and China’s Xi Jinping could meet in mid-March, but that has not been verified.
Either way, Roose says, the best hope for farmers is simply that the trade war ends and no further damage is inflicted on U.S. exports.
Unfortunately, the longer the trade war goes on, the more the odds grow that long-term exports from the United States will decline as other countries expand production and China finds new sources of grain.
And while the month-long federal government shutdown ended a few weeks ago, the latest deadline to keep the government open is again upon us. During the interim, the USDA tried to update some production and usage numbers, but the market was underwhelmed by what it saw and prices remained weak.