Watching Crop Progress
The fall crop is mostly in the ground, and the world supply and demand estimates indicate large stocks of most commodities. The trade now turns its attention toward the developing crop. In some years, we can start to see the market respond to growing conditions, or what they call crop scares, due to things like too much or too little moisture.
Joe Vaclavik gave some advice for marketing commodities during a crop scare in a recent “Grain Markets and Other Stuff” Podcast.
Vaclavik… “I think the two big take homes for me, at least kind of reading back through what I wrote here is that you've got to be aware of, of what's going on around you when it happens. I think that be aware that that production uncertainty is going to be an obstacle when it comes to marketing and be aware that that shift in sentiment, and I guarantee you, there will be a shift in sentiment if you see a significant crop scare event. Those are going to be your two obstacles when it comes to grain marketing, and you've got to somehow see your way. You've got to know that those obstacles exist and somehow work your way around them. And that's the trick. Those two things: production uncertainty paired with the shift in sentiment. Those are your two obstacles if a crop scare event were to occur this year or any other year.”
Vaclavik encourages growers to remain objectives and to look for marketing opportunities in the midst of shifting sentiment during these crop scares.