Elevator with February calendar

Now that the market has shifted to February there are some new factors influencing grain, according to Karl Setzer, a market analyst with Agrivisor.

One calendar item is the upcoming Ag Outlook Forum in Washington, D.C., Feb. 20-21. That event will offer some information about what the USDA sees coming for the market, such as long-term projections for commodity production and demand.

The Feb. 11 WASDE report from USDA will also be one to watch as traders look to see whether some of the recent news events have had an influence on sales and outlook.

In the past week, the spread of the coronavirus virus and concern surrounding it have hit the markets hard. China announced it would launch a $174 billion effort to offset the fiscal losses in its economy related to that virus (compared to the $52 billion in spent in 2002 in response to SARS).

“That’s a big number,” Setzer said.

On Feb. 3, China also announced it may want to renegotiate the phase one trade agreement that was just recently signed. That could be good news or bad news, Setzer said.

And there have been weather issues related to the corn crop in Brazil that could influence the market.

The end result of all this news is that at a time when the market is normally in the doldrums it is actually jumping all over trying to decide how to react.

Setzer said he sees some potential for a rally in the corn market, adding that he thinks today’s $3.75 area prices could make a run at the $4 level. But he said the corn basis could be especially volatile.

Things are a little less upbeat for soybeans.

The early projections are for higher acreage numbers for both corn and soybeans. But higher acreage expectations combined with the fact that there are some corn acres from 2019 that have not yet been harvested means there is the potential for a major time crunch at planting time. That will put more of an emphasis on spring weather conditions.

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Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.