Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Impact of Swine Flu Outbreak on Commodity Markets
Financial markets opened this week with a bad case of “swine flu jitters”. The jitters should be alleviated with the idea that those fears are likely to be overblown. The initial reaction in the grain and oilseed markets to the swine flu outbreak was bearish. That bearish reaction took commodity prices down the first few days of this week. The longer term impact of negative implications are said to lack merit. Financial and commodity markets were bidding up in Wednesday morning’s trade.
Planting Progress
U.S. corn plantings have surged ahead this past week, now placed at 22% planted for the week ending April 26. This is well ahead of the 5% pace recorded last week, 9% reported last year and slightly behind the five year average progress of 28%.
U.S. soybean plantings, reported last week for the first time this year, stood at 3% as compared to 2% last year and the five year average of 5%. Unless a significant change for the worse occurs in the weather, information from reliable sources indicates that overall conditions in the Corn Belt are not as wet this year as they were at this time last year. Nevertheless, planting progress will be watched closely each week between now and the first of June as commodity traders weigh any possible acreage shifts that may occur.
Marketing Strategy
Weather forecasts continue to call for wet and cool conditions in the eastern Corn Belt where planting progress is well behind the 5-year average in Ohio, Illinois, and Indiana. We could see noncommercial speculative traders add to their net-long futures position in the corn market if planting delays in these key states continues to persist in the weeks ahead. Rumors are circulating that China may be stepping out of the soybean market for awhile, leading to a possible decrease in U.S. exports.
Noncommercial traders continue to hold a net-short position in the wheat market thereby keeping seasonal downward pressure on wheat prices. Currently, Dec ’09 new crop corn futures are trading at $4.09 per bushel; Nov ’09 soybeans at $9.13; and July ’09 SRW wheat is at $5.28 per bushel. Nearby May ’09 old crop corn, soybean and SRW wheat futures are trading at $3.80; $10.08; and $5.16 per bushel respectively.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.