When I first heard the phrase weather market around 50 years ago, it meant that somewhere in the Midwest it had stopped raining and until that area started receiving some precipitation, the grain market was going to move upward.
Like everyone else, I liked hearing the grain market was going higher as long as the weather market was talking about dry conditions somewhere far away, like Illinois.
Then, in the later ’70s and through the ’80s, when South America and Brazil, in particular, was having greater influence in the grain market, we could have a weather market when dry conditions occurred there.
Once again, bad news for South America was good news for me since prices were moving higher and the poor conditions did not affect me.
More parts of the world started directing the grain market and the three main components that made the market, complex were corn, soybeans and wheat.
I remember a drought several years ago in the wheat region of Ukraine was starting to drive up the price of corn locally.
Fifty years ago, I would not have thought weather on the wheat crop in Ukraine influencing corn prices in the Midwest would be possible.
But with increasing demand, improved shipping, and better communications throughout the crop-growing areas of the world, meant the grain market was global.
Our horizons had gone beyond the Midwest and were now worldwide.
And there was something else that the term “weather market” was including. It did not necessarily mean that there were poor growing conditions somewhere.
This year has shown that good growing conditions can create a weather market as we seem headed for high yields this fall and this weather market is driving prices downward.
The August crop report will be public when this is printed and as I am writing with the report only a few days away, the crop analysts I listen to are wondering how much this weather market will drive the USDA numbers with everyone paying particular interest to the yield numbers.
Like predicting the weather, where everyone has an opinion and some are better than others, predicting the crop size has everyone agreeing in a general consensus, but will differ in the details.
The question for this year is, “How big is big?”
The wheat crop is being harvested with corn and soybeans in the last stages moving to the next subject of importance – first frost date.
Our weather market continues.
We have the grain analysts and the weather people trying to predict the future by peering into their crystal balls which seem to resemble a computer monitor.
My point in all this is that the phrase “weather market” has expanded, so it applies worldwide and does not necessarily mean bad weather somewhere.
Due to growing conditions in the southern hemisphere, we can have a weather market in January during a blizzard.
A weather market can occur any day of any month, anywhere for any reason, good or bad.
I will frequently hear a naysayer sneeringly refer to “Big Ag” to imply that is a bad thing.
The truth is ag is not only big, it is huge.
Where we once watched our neighbor’s fields, we watch fields from all over the world to see their growing conditions and crop progress.
What a difference from 50 or so years ago when a weather market meant it had stopped raining somewhere in the Midwest.
Rye is a Farm News staff writer and farmer from Hanlontown. Reach him by e-mail at email@example.com.
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