WASHINGTON — Mid June is typically a time when commodity markets are pretty excitable, but according to one market analyst there are some added elements that could make this June more volatile than usual.
“The trade issues that we have been dealing with lately are coming to a head, especially now that we have broken off talks with NAFTA partners,” said Mike Zuzolo from Global Commodity Analytics. ”We also haven’t come to any resolution between the United States and China. However, June 15th is the hard deadline for the steel and aluminum tariffs and if those got into effect we will be watching for reciprocal penalties that other countries might put in place against the U.S.”
Zuzolo is also keeping a close watch on supply and demand, both here and abroad.
“We still don’t have a good bearing from USDA what the South American corn and soybean supplies are and you can see that in recent market action,” Zuzolo said. “Soybeans were the big leader to the upside just a week ago and now they’ve lost about 40 cents, in part to concerns with lost demand to the South American crop.”
Every year at this time weather plays a factor in commodity prices and conditions in the Wheat Belt are elevating weather’s role in 2018.
“Harvest conditions are not very good right now and harvest appraisals are coming in pretty similar to the wheat quality tour,” Zuzolo said. “I know as many farmers harvesting for the wheat as are harvesting for the straw because hay prices are so high in the west due to the ongoing drought.”
Zuzolo said that these multi-layered market factors will give producers more of an idea in Mid June if they will see some upside potential to market some of their crops or whether they will wait to do so in the later part of summer.
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