Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
CFTC Forum Produces Mixed Bag
Tuesday’s Commodity Futures Trading Commission led forum in Washington, DC may have raised more questions than answers. Having watched a fair portion of the day’s proceedings there are several factors that have led to the current situation in the agricultural futures market’s sector. Among those factors, the extent of the impact that billions of new dollars of speculator investment have had on U.S. agricultural futures markets is still under consideration. CFTC is likely to compile a list of suggestions for the trading exchanges to consider enacting as a result of the forum, although there did not appear to be a consensus on which suggestions might be forthcoming. Among other things that might occur, watch for information concerning swap contracts. The Chicago Board of Trade, on Tuesday, requested CFTC approval of swap contracts for corn basis swaps, calendar swaps for corn, wheat, and soybeans to be traded over the counter as a tool to deal with volatile markets.
Volatile Commodity Trading Expected To Continue
The price of crude has surged about $4.00 per barrel higher than last week’s all time high with the April contract going off the board in yesterday’s trading slightly over $118.00 per barrel. Meanwhile the U.S. dollar index is harboring near recently set lows.
Argentine farmers are threatening to strike again due to their government’s plan to tax soybean exports on a sliding scale, meaning the tax would increase as soybean prices increase. This development is currently helping U.S. soybean exports and has the potential to help U.S. soybean exports even more. Therefore, this is not the time to advance soybean sales. For the week ending April 17, 2008, U.S. soybean exports are already reported to be ahead of the pace needed to meet USDA projections of 1.075 billion bushels for the ’07/’08 marketing year. The weekly export sales report for both corn and wheat were called neutral before the market opening this morning.
Weekly Crop Progress
U.S. corn plantings were reported at only 4 percent for the 18 states that planted 91% of last year’s corn acreage, 2 percent more than last week and well behind the five year average. Commodity traders will be watching the weather closely over the weekend.
Currently (4/24/08 ahead of the open), Dec corn is trading at $6.12 per bushel; Nov soybeans $12.58; July SRW wheat at $8.31 per bushel.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.