The markets were pretty blase about yesterday’s USDA supply/demand report, seeing little in it to get too excited.
Corn went up a little bit on slightly reduced USDA projections for 2009/10 ending stocks, old crop soybeans went down a little bit and new crop went up a little bit on healthy 2009-10 demand projections, and winter wheats went up a little bit in sympathy with the other crops. Spring wheat went down a bit because of good conditions in North Dakota and expectations of some record yields, and the expectation that U.S. exports will be up while Canadian and Argentine exports will be down.
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Some elements in the report were slightly different than expectations, but not by enough to knock any traders and brokers out of their lawn chairs to drive the market anywhere.
Spring wheat is the most disappointing for us up here, because there was nothing to change the generally downward progress of that subset of wheat. Spring wheat seems to have stabilized, but as Allendale said this week, “Spring Wheat has curbed its losses recently, but hasn’t shown any clear signs of a bottom”
Right now most market considerations are beyond producers’ attention. They’re looking at their fields and wondering how to judge their crops. Are they looking great, good, terrible, awful? That’s hard to say for a lot of folks on the eastern prairies, because most crops are lush, well developed and capable of producing a big harvest. But they’re terribly late, and all that potential could evaporate faster than a new president’s popularity if perfect weather conditions don’t ensue.
A couple of days ago on the street I ran into a farm marketing advisor and analyst who noted that his own soybeans are just flowering now. So does he have a good crop, or a bad crop? Hard to say. As we were chatting another analyst walked up and joined us (apparently crop market analysts are the only people not on summer holidays in Winnipeg right now) and I asked him about the theory that the full moon at the start of September suggests frost is likely then. He laughed and repeated what I’ve heard from a number of weather experts – there’s no correlation between full moons and frosts other than when you can actually see a full moon there’s a higher chance of frost because there are obviously no clouds in the sky that night and so the heat isn’t getting held in.
Another theory that’s getting talked up by folks right now is the “blue moon” theory, which says that there tend to be frosts and rallies (the one causing the other) whenever there’s a blue moon, which means having two full moons within a single calendar month. Again, this analyst, who years ago pulled out all his hand-drawn charts to check the correlation, said it was bogus. But it’s a theory that’s likely to get good mouth time from chattering heads in the next couple of weeks because September is going to be a blue moon month.
These full moon theories may sound a little whacked to those of a rational mind, but many farmers, analysts and business folks actually take them seriously. One grain company exec speaking at the recent Canadian Special Crops Association discussed both the early full moon in September and the blue moon phenomeon as legitimate factors rather than curiosities, and no one there seemed to think this was odd. I guess it isn’t odd, because we all talk about this kind of stuff, as I was doing with my colleagues there on the street a couple of days ago.
It’s a rather tame version of soothsaying, I must say. My stepfather recently was worrying me about the Mayan calendar’s prediction of the year 2012 being the end of the world. Yesterday, when I was at the Rogers video rental store, I saw an entire documentary is dedicated to scaring us with this end-of-world prophecy. Perhaps 2012 is when the stone temple pilot’s space ship is coming back to take us away, or something.
Anyhow, while some out there are getting their gitch in a knot over this Mayan prediction, I think I’ll keep myself busy worrying about frost. For the ag industry, Jack Frost can be as fearsome as any stone temple pilot. And he might be visiting sooner.
