The spring planting season is well underway in several regions of the United States. Now that it is, we will start to see a change in the fundamental factors that impact daily price discovery.
For one, now is when more attention is placed on daily weather forecasts. We have seen segments of the Corn Belt and Southern Plains states suffer from drought for the past several months. While the trade has been monitoring these regions, now that crop seeding and development is taking place any continuation of drought will receive more of a market reaction.
This may also cause a change in the market that we haven't seen for the past several years with the addition of risk premium. Risk premium is a term used to describe the buying of futures by a trader, normally an end user, to offset risk if production happens to fall short of expectations.
Given the fact we already have tight balance sheets forecast for the United States, we may see more of this buying than in...