MARKETS
There is plenty of story yet to be
written in this upcoming crop year.
We could see prices bounce back
going into the summer months.
long term on commodity prices. That hasn’t happened — rather,
the feud continues and the unexpected has become reality.
Commodity markets have seen low volatility overall in the
past few years partially because of consistent strong global crop
production offsetting the increase in demand. For example,
last year’s crop failure in Brazil and Argentina was offset by the
cushion of global coarse grain stocks. All in all, markets have
been relatively calm with short-lived erratic price activity, until
recently. The significant drop in flat price over the last 30 or so
days has thrown everyone in the trade for a loop, but again there
was likely no one that expected the trade war issues to have this
big of an influence on the markets pushing the funds to liqui-
date their long positions further.
If recent price volatility is any indication of what the rest of
this year and going into next might look like, we may be in for
some real challenges ahead. As recently as June 19, the trade
witnessed a 19-cent trade range in corn, a 65-cent range in
beans and a $0.045 cent range in cotton. This was also the day,
as well as days leading up to this, that some producer marketing
tools limiting how much downside protection they provided
Main Bank
202 E. Jackson Street
P.O. Box 470
El Campo, Texas 77437
(979) 543-3349
Motor Bank
205 E. Calhoun Street
P.O. Box 470
El Campo, Texas 77437
(979) 543-3349
GRAIN
were “triggered,” eliminating any further marketing and there-
fore downside price risk management for the producer. Other
more transparent and more conservative strategies, such as the
utiliza