Anyone think it’s time for another dose of weather market volatility?
I do, but that’s just because I’m looking for a bit of excitement to get me going.
However, more seriously, a broker I talked to Monday noted that he thought the grain markets had become remarkably quiet, with the exception of odd days of action, and that it was probably time for the second big phase of the usual summer weather market to kick in.
And that timing does seem to make sense. We’ve gone through the annual “battle for acres” in the winter and early spring, then gone through the ups and downs of the seeding/planting season, where everything that helps or hinders farmers makes the market jump around. Then we’ve had the annual assessment period of “what actually got in and how does it look.” And we’re sitting pretty.
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Crop got in. It’s OK. Good, actually. (Great-looking in Canada)
So everybody’s relaxed a bunch, kicked back and poured themselves a frosty beverage and turned on the baseball game.
That makes me think it’s time for things to get interesting again. We’ve plugged a lot of complacency into the market now – reasonably, because things look great – but that’s an apple cart some sorta weather problem could choose to take a run at.
So I think we’re primed, due and deserve it, just to make things interesting again.
But at this point, let’s give some credit to the resiliency of our farming system, which managed to get a big, good crop in despite lots of poor conditions this spring. The winter hung on forever. Soils didn’t warm up for a long time. Everything had to be done in a rush. And things got done remarkably well.
That’s partly due to skilled farmers using great machinery and methods to get done what needed to get done. And the good condition of the crop now has lots to do with good genetics in the crops bred-in by the breeding companies.
But we’ve also got lots of luck here. As Bruce Burnett of the Canadian Wheat Board pointed out to me Monday, it’s hard to imagine what situation we’d be in now if we hadn’t gotten an unusually clear, dry period following the super-late spring melt. A handful of one-inch rains could have made the situation much worse.
But everything went well in most areas and we’re remarkably close to normal with our prairie crops, and with U.S. crops.
As World Weather Inc.’s Drew Lerner said to me Friday, “It looks pretty darned good. I think God’s shining pretty brightly across your guys’ space
“I think what’s happened up there in the Canadian prairies is absolutely amazing. As late as it was in melting that snow, what are the odds of us getting that many days without precipitation so the ground could dry up? Compared to what could have happened to us, oh my gosh!”
So that’s why the markets are so complacent right now. So much anxiety and worry is gone and – miracle of miracles – we’ve got a good crop out there.
Now it’s time to start worrying about getting that crop all the way through.
