Grain prices increased across the board on Tuesday, with cattle reaching new highs and hogs trading lower, according to an April 14 report. Analyst Jon Scheve of Scheve Grain said the markets are now more focused on their own fundamentals rather than being influenced by external factors such as crude oil price fluctuations or geopolitical developments involving Iran.
This development is significant for farmers and agricultural professionals who rely on market trends to make planting and selling decisions. Scheve said, “When you have oil up nearly 80% from before the war to its highest point in the middle of it, and corn was up less than 10%, I don’t think that corn was remotely following the crude oil. I think those are two separate things. Iran isn’t a producer of corn. It’s going to be a consumer of it.”
Wheat led gains due to weather-related crop concerns, particularly in hard red winter wheat regions like western Texas through Nebraska. The United States Department of Agriculture reported that only 34% of winter wheat is rated good to excellent, down from last year’s figure. Texas showed just 15% rated good or excellent while Oklahoma stood at 10%. Scheve said this dryness is supporting prices: “Today we’re seeing the hard red wheat…trading significantly higher while the eastern Chicago wheat isn’t moving up as much…just how dry it is out West and concerned that maybe they’re going to miss some rain.”
Corn followed wheat but faces pressure from high domestic supplies and USDA feed estimates that Scheve questioned: “They have the feed number on cattle so significantly high that how on earth are we going to meet those numbers?…None of those numbers make any sense.” He predicted these estimates would eventually be revised downward, which could keep a lid on corn prices.
Scheve also addressed concerns about fertilizer costs impacting planting decisions this spring but believes major effects will come later: “There was too much fertilizer not purchased in Ohio and specifically in the Southern states…I just don’t see why someone’s going to plant corn when they can look at $11.50 beans…” He noted global issues with diesel shortages affecting countries like Australia and Vietnam could influence future crop production worldwide.
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