Markets aren’t reacting to Midwest flooding
Flooding is a major concern across many parts of the Midwest, but it’s not impacting commodity markets just yet.
Don Roose of Des Moines-based U.S. Commodities says that’s because long-range forecasts indicate drier and warmer weather. “I think that’s one of the reasons the trade is just cautious to embrace it right now at this early stage,” Roose says. “Because remember back just last year, we were very wet in April and some of the areas continued wet—but for the most part, the crop was planted and the yields were very acceptable.”
But Roose says the potential is there.
“Funds a sitting near record short in the corn. Big shorts, records, on the Kansas City wheat. So there is ammunition that if the weather doesn’t cooperate, that there’s some potential that we add risk premium for weather issues going down the road.”
Roose says there’s another possible bullish factor to consider–because of last fall’s weather issues, many farmers still have a considerable amount of fieldwork to do before they can begin planting this spring.
AUDIO: Don Roose