Maybe the worst news for today’s grain markets is no news.
“That’s the biggest stumbling block we have in the market right now,” says Karl Setzer, a market analyst with Citizens L.L.C. in Charlotte, Michigan. “There is just no news.”
Much of the news to hit the grain market in the past year has been bad, Setzer says, so there may be some truth to the idea that no news is good news. But no news also means there is nothing to nudge the market out of the low trading range it presently occupies.
“There’s nothing shocking out there right now,” he says. “We know planting is going slower than on average, but that’s not a surprise.”
For farmers, the fact is that little is on the horizon to push old-crop corn or soybean prices much higher right now. With that in mind, it might be useful to look more at new-crop 2019 grain. At this early date it appears world stock figures may tighten in the next year as demand figures remain strong and supply numbers look likely to slip a bit.
One date he looks at is May 20. History shows that as long as 70% of the corn is planted by the third week of May, few acres will shift from corn to soybeans. If the planted figures are below that 70% level by then, Setzer says, it may send a signal that some corn acreage may shift to soybeans.
While the attention in the United States is on planting, Setzer says the harvest is progressing in South America and that is putting some downward pressure on U.S. grain prices. There is also some concern that the African swine fever outbreak in China could lead to a drop in Chinese pork production and thus a drop in the Chinese demand for soybeans.
There are also some logistical concerns regarding the floods in the Midwest. Road closures and other closures due to the floods could impact grain movement throughout the spring and summer.