The commodity markets and the weather are creating worries for growers, and contributing to the general feelings of buying hesitancy among growers and dealers. The corn market headed lower early this week, which coincided with a sell-off of the dollar. Then midweek the corn market attempted to rally, says Keith Swanson, CHS risk management services. “But new crop estimates out of South America just keep sounding bigger and bigger, so corn closed down at new lows. That’s a very bearish signal for the market. The message is that rallies in corn prices can’t be sustained at this time.”
That’s likely to have an influence on crop nutrient sales in the coming weeks, he notes. “The markets and the weather are the two big factors now. And we’re already seeing a slow start to spring application down in Texas, due to the storms and general wet conditions there, and farther north, as well.”
He says that this will be the first real application season where there might not be enough product when growers want it, due to very low inventories at both the producer and dealer levels. “If we see another wet spring, that could temper the effects of a system that is currently short on product within the supply chain.”
But if the weather starts to dry out and warm up later this month, product demand could take off and dealers could face some very big supply challenges, he concludes.
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