Sliding Markets and Port Activity - Tuesday, 17 November 2015

We’ve been hearing about our weak export market especially in the corn market for a while now.  According to data gathered by the trade researching firm, Zepol Corp., our nation’s ports are quiet in general.  The Wall Street Journal analyzed the data collected from the Zepol Corp. and found that during the peak shipping season of August through October our 3 busiest ports of Los Angeles, CA; Long Beach, CA; and the New York Harbor area; saw more than a 10% decrease from normal levels.  Is this sending us a warning about the U.S. economy?  When import volumes are high retailers and manufacturers tend to have a more optimistic and confident view, when the ports are quiet fears of a slowdown grow.

 

There is debate amongst economists as to whether this is a short-term downturn or more significantly, a sustained period of weakness. 

Kevin VanTrump of the VanTrump Report reports that, “from a technical perspective it feels as if this market wants to continue trading in a range-bound manner, I suspect comfortably between $3.40 and $4.10 per bushel.” With bears continually insisting that the U.S. corn yield is getting larger and may push over 170 bushels per acre, he warns that we need to be “mentally prepared for additional downside price pressure between now and the year-end.”  Our greatest hope at this time lies with production setbacks in Brazil and Ukraine but if these headlines ever appear if will take time to truly develop into a situation that moves our prices higher here at home.

Soybeans are also facing a downhill slide.  The bank, Morgan Stanley, sees little upside potential in beans and is recommending a “sell” on the futures market.  They feel that the political situation in Argentina will likely convince farmers in that country to “unload hoards” of their bushels.  Farmers in Argentina are currently sitting on record soybean stocks according to the U.S. Department of Agriculture estimates.  If the expected Ag reforms happen, it is likely that we would see heavy soybean selling from those producers.
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The National Weather Service has given the 6 to 10 day outlook, from November 20th-24th.  According to this forecast the eastern portion of the country can expect above normal temperatures while the Midwest to the Pacific Coast can expect colder than normal temperatures.  Precipitation is expected to vary widely by region.

Days like today remind us that winter is not far off anymore.  We have talked a lot about El Niño over the past 6 months and the conversation continues.  The Weather Channel has taken snowfall data (in areas where the data exists) from NOAA to determine what influence El Niño will have on snowfall this winter.  The data they compared, from 51 locations, had 23 El Niño, 20 La Niña and 22 neutral seasons of snowfall data to compare.  There are many factors that determine when, where and how much snowfall will occur so when looking at the maps below remember El Niño is only one part of the equation determining how snowy our winter will be.

 

 

 

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