There is a little bit of a rally in the grain markets, which is welcome to farmers searching for some good news this fall.
“The biggest thing is that the market got caught with a harvest that is unusually slow all over the country,” said Don Roose, president of U.S. Commodities in West Des Moines.
The Midwest isn’t the only part of the country where wet weather in September and October has slowed harvest, Roose said. Hurricanes coming from the south have brought heavy rain to the southeastern United States and have slowed harvest in that area as well.
The end result is the market is now adding some needed risk premium due to both the timing of the harvest and the concern that grain quality may be suffering.
That wet weather and concern for grain quality are certainly not good news for farmers, but they are boosting prices at the moment.
Add in the fact that world grain demand has remained strong through the present trade situation and there are reasons for optimism, Roose said.
He said corn exports are presently running 51 percent higher than a year earlier.
With those items in mind, now might be a good time to market some grain, if you are confident that you have a crop to market, he said. Roose pointed to prices on the Chicago Board of Trade of $4 per bushel for July 2019 corn and $4.07 for December 2019 corn.
There is still a problem in the fact that the basis is working against farmers. And there is still significant uncertainty in export markets due to the Trump administration’s trade war with China, as well as trade disputes with other nations.
But for some farmers, now might be the time to strike while the iron is hot as far as the market is concerned, Roose said.
“World supplies just got too low and there is a bubble to tap,” he said.