Spring Markets

by Dakota Olson

by Dakota Olson

The weather is sure warming up and as I drive down the roads I’m seeing a lot of equipment in the fields. Even though the calendar hasn’t quite switched over, spring is finally here!! Spring is my favorite time of year, except for losing that hour of sleep that seems to take me a week to get used to.

The markets seem to be celebrating the beginning of spring in their own fashion and don’t seem to be so “doom and gloom” right now. I would like to think that we’ve made some lows and now we are on the uphill climb. However, there are still too many factors looming that might work against us. We have a get the crops in the ground and wait for an entire growing season before we actually know what kind of crop we will have on our hands. We also have the outside markets staring down the grain markets – crude oil hasn’t necessarily picked a comfortable position to stay and the US dollar finds more and more strength just when we think it might be slowing down. Also, don’t forget about the campaigns and elections over the next few months. There are still plenty of unknowns in the marketplace, but one thing we do know is that we still have a very large crop from this past harvest.

Soybeans have been the leader in the markets here during the first half of March.  May soybean futures dropped to a low of $8.56 on March 2nd and have since climbed to $8.97 as of this writing. A $0.41 move in the soybean market hasn’t been an easy hill to climb thus far, especially with the USDA adding an additional 10 million bushels to the US carryout last Wednesday. This increase in the US soybean carryout was the result of a 10 million bushel decline in crush, a demand item on the soybean balance sheet. Initially the trade would view this as a negative item toward the soybean market, but it seemed to move through pretty easily and break through new resistance levels.

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Soybeans are again feeling a little outside pressure to start the week with the Brazilian Real continuing to weaken and the US dollar finding even more strength. The markets don’t seem too concerned about this as we are still trading near highs on the charts that we haven’t seen since mid-December.

What’s the story this week?  Before we get the planter shined up and head to the field, we want to remind ourselves to place offers that can work while we are busy. We have been working with a few strategies lately that would allow us to put in a floor on new crop beans and have some upside potential should the market decide to rally even further.  We also like the idea of cash sales for beans that will be delivered to town at harvest. Talk with your ProEdge Grain Specialist or Risk Management Consultant today to ask about strategies that are currently working and get offers in place before you hit the fields. You never know, the markets might find something crazy to talk about this spring!