It’s pretty easy being green, especially when that’s the colour of gains on the contracts on the Chicago Board of Trade.
At mid-morning all the ag commodities were trading up, with March winter wheat leaping by 18.6 cents to $5.61, soybeans up by 16.4 to $9.66 and corn up 8 cents to $3.66. Oats was the laggard, up only one cent to $1.88.
That doesn’t break the recent downdraft in ag futures prices, but it’s a robust move and it comes on the heels of supportive fundamental news. China has acknowledged that drought has reduced its winter wheat crop and may delay spring seeding.
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The Office of State Flood Control and Drought Relief Headquarters said that 46 percent of the wheat crop is damaged and that 23 million acres are threatened by conditions “rarely seen in history.”
As always producers here benefit when producers elsewhere suffer weather problems, as foreign farmers benefit when prairie farmers suffer, and this sort of problem is just the sort of thing the market could use to lift itself out of the recent doldrums. After a sharp price recovery from the early December lows, the market has gone into a zig-zag correction, or perhaps the start of a decline, in recent weeks. Everyone on the crop selling side of the equation would like to see another leg up to the abortive December rally. Problems in China and a continuation of problems in South America could provide a lucrative lift into the crucial pre-seeding season and offer some new crop prices that would make paying the fertilizer bill a lot easier.
