The grain markets have been choppy lately. Naomi Blohm, senior market advisor at Total Farm Marketing, said a stronger U.S. dollar is one of the reasons behind the action.
“That is definitely a component of it, with the dollar getting over 100 and now trading near 101 and a half, that has, in a sense, been weighing on commodities, so just remember when the value of the dollar is higher, that affects currency exchange rates. A higher dollar can make it more expensive for other countries to import our products, so we have seen just a slight slowdown, in a sense, of some export sales. But also, we’re kind of in that time of year when the bigger end users globally, I think, wait to find that harvest low at some times, which can occur like in August or early September, and then they come in with gusto and do some buying, but the increase in the value of the dollar is not helping things in the short term.”
There hasn’t been sharp movement up or down recently due to a perceived lack of fresh market-moving news.
“So, grain prices, of course, have had that first initial push lower on the notion, to your point, like the U.S. crops so far are doing okay, with not any big weather scares at the moment on the global scene. We’re still viewing good enough production globally to make global supplies available to the world whenever it’s needed.”
Fresh news will hit next week when USDA releases the June Acreage Report next Tuesday.
“Like you mentioned, the acreage report and quarterly stocks. Then, on July 1, we have to start looking at the USMCA agreement. Is it going to be renewed or not? That uncertainty with our major trading partners could wreak havoc on the market. It could be supportive if they sign it right away. It could provide uncertainty if they don’t. And then we’re going to be heading into a three-day holiday weekend.”
The markets will always keep an eye on the weather too.
“The weather right now is starting to turn hotter and drier for July. That might give us a bump higher next week in conjunction with these reports that are coming out. And then, just be aware, though, any rally that we get might be that next selling opportunity for cash sales, because seasonals really strongly suggest, of course, past performance, not indicative of future results, but the seasonals do suggest anytime you can get that bounce into Fourth of July weekend, a lot of times when we come back from Fourth of July, prices then make the next step lower.”