With the coming of the vernal equinox, even a dormant market can shake off the winter blues, and that is what has happened.
Some of us think of the vernal equinox bringing the first signs of spring but not a commodity market. However, there is plenty of precedence for it.
Personally, I look for fog and low-pressure systems at the equinox as predictors of a moist first week of May — it might be an old farmers’ tale and not very reliable, but I like it.
There is something more reliable that you could count on from the third or fourth week of March — the official shift from winter to spring in the Northern Hemisphere and from growing to harvesting season in the Southern Hemisphere. It is when marketers and marketeers get a better picture of what the coming crop year might look like from a supply and demand perspective.
In part, they get it from the large U.S. Department of Agriculture planting intentions and supply and demand reports.
At this point in the year, farmers in Argentina and Brazil have a better image of their yields, while in North America, inventories, sales and trade issues, as well as demand, are now well discovered for the season. Prices and spring moisture are projected, and this results in Northern Hemisphere farmers making their final plans for seeding.
It’s not as much fun as reading the Old Farmer’s Almanac but likely a better bet.
This year at the equinox, the USDA found, after sorting through the entrails of the current grain year, that despite very large grain and oilseed inventories, global demand has remained strong and the stored stocks numbers are falling, sort of.
Soybeans remain a hot ticket in the world’s food market with meal and oil remaining healthy. However, corn’s recent market climb has put American farmers back in the mood to plant the big yellow cereal, at least in the Midwest. In the northern Great Plains, spring wheat is trending up, which is too bad for prairie producers. For that one I would like to send the folks at the USDA back to the Magic 8-Ball again.
U.S. farmers will likely choose corn where they can, and this is putting some unexpected pressure on soybean acres, which will be good for canola, so there is an upside.
Predictions of India’s winter harvest are for good yields and even better domestic subsidies.
I am glad it was foggy.