News

Weather market rallies not likely

A grain market analyst says chances of a weather market rally have waned after planting progress surged ahead over the Memorial Day Weekend.

Ted Seifried with Chicago-based Zaner Ag Hedge tells Brownfield if the forecast remained wet this week and further delayed planting progress, there could have been a chance for a stronger rally.  “We put in a very large weather premium in the market last year only to have to take it all away in the second week of June.  I don’t feel like the market wanted to do that again this year.”

He says since there isn’t currently a weather premium built into the market, if there are unfavorable growing conditions in the Corn Belt, it could cause major price swings.  “With your large speculator having a very short position and carrying it further along into the growing season than they normally do, it wouldn’t take that much to get a fairly healthy rally.  By that I mean maybe 40 to 70 cents in corn, maybe 80 cents to a $1.40 in soybeans.”

Seifried says he’s keeping an eye on increasing drought conditions in the northwest corner of the Corn Belt and what Brazilian farmers do because of political and weather challenges for market shifts into summer.

AUDIO: Interview with Ted Seifried