We are starting to see a shift in the focus and influence of weather on the commodity market. Until now, nearly all weather related interest in the market has been on South America, but this will start to shift.
While South American weather is still very much a factor in price discovery, more interest starts to be placed on U.S. conditions as we approach the spring planting season.
The most interest in the United States right now is on the Plains states, where drought continues. Currently, 65% of the U.S. wheat production area is in drought. While there is time for these conditions to improve before winter wheat comes out of emergence, precipitation will need to start to fall soon, or we will see production estimates lowered.
These dry conditions in the Plains are starting to creep into the Western Corn Belt as well. The most concern is on Iowa, where soils were already abnormally dry last fall. This is ...