Hard to Find Buyers, Sellers, and Freight
Better news for producers going home on Friday. China announced purchases of U.S. corn, hard red winter wheat, pork, and sorghum. Markets sure ended the week going a lot better direction than when they started.
The cash market for many commodities remains illiquid as farmers aren’t interested in selling with the futures down so low and most end users not really needing to buy. Those that do need to buy however, are having to increasingly pay up for basis.
Then there’s the challenge of getting freight, says Andrew Jackson, a Marketing Consultant for Producers Hedge in Kentucky.
Jackson… “The biggest thing that I'm concerned about right now is truck flow movement, because there has been a lot of corn in Kentucky that has been sold to the South. You know, it's not uncommon for corn and Kentucky to move to Georgia, for instance. So one of the things we're concerned about is sales that have been put on, can we just get wheels underneath it? But so far, you know, a lot of our corn goes to local feed mills, so you know, whether that be beef cattle, dairy cattle, poultry, whatever. And those guys are going to continue to run, I think right now.”
Jackson says the challenges of finding freight are likely a combination of demand to move good right now and some drivers choosing to self-quarantine.
That corn China purchased? 750,00 metric tons, which makes it their largest purchase since the 2013/2014 crop year. The wheat purchase was no small amount either: 340,000 metric tons.
So good fundamental news on the ag side to end the week last week.