Last week’s big Crop and Wheat Plantings reports from the U.S. Department of Agriculture sent futures markets tumbling. But today, these reports are old news, as the markets are being influenced by “today’s” news.
For instance, while January weather usually is a little early to grab the attention of the grain trade, dryness in South America corn and soybean growing regions has traders on alert. It is speculated that rains last Thursday across Argentina and Brazil may have contributed as much to the grain markets as the lack of bullish numbers in the USDA and WASDE reports.
For the next six days, some weather services predict moisture for the corn growing regions of Argentina. However, long-term outlooks remain a concern to a world feed grain balance sheet that is already tight.
In wheat, the Ukraine – a major wheat-growing region – is suffering from dry conditions that are hurting winter wheat conditions. Meanwhile, the winter wheat producing region of the U.S. (including Kansas) is certainly due for some moisture.
It has been an odd year already, weather-wise. Kansas – the nation’s top producer of Hard Red Winter wheat – has had several spells of unseasonable warm weather and little precipitation since the first part of December. The outlook for precipitation does not look favorable for several weeks into the future.
The Kansas wheat crop certainly has a long way to go and will need better cooperation from Mother Nature than we have had so far in 2012.