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Risks In Agriculture As The Growing Season Is In Full Bloom


  • Corn, soybeans, and wheat prices remain weak.
  • The US-China problem comes back.
  • COVID-19 is a problem for the grain belt.
  • A potential for problems with the supply chain.
  • It’s all about the weather for the coming weeks - JJG is a grain ETN product.
  • Looking for more stock ideas like this one? Get them exclusively at Hecht Commodity Report. Get started today »

On June 11, the USDA will publish its June World Agricultural Supply and Demand Estimates report. I will post my usual pre-WASDE piece on Seeking Alpha sometime next week before the monthly data release.

We are now moving into the growing season across the fertile plains of the United States. The most significant factor when it comes to the path of least resistance for the products that feed the world is the weather. Any prolonged hot and dry period could cause yields to decline and prices to rise. Each year, the crops face the same uncertainty when it comes to Mother Nature. The last time the US had a significant drought was in 2012. During that year, corn and soybeans rose to record highs, and wheat moved to over $9 per bushel. As we move into the growing season, grain futures prices are at far lower levels than eight years ago. 2020 has been anything but an ordinary year. Meanwhile, the population of the world continues to grow by around twenty million people each quarter or eighty million per year, according to the US Census Bureau. In the grain markets, each year is a new adventure in the supply side of the fundamental equation, but the demand side is continuously growing. Technology and the weather have cooperated with producers over the past eight years as crops have satisfied rising demand.

Meanwhile, corn, soybean, and wheat futures prices on the CBOT division of the CME are not running away on the upside at the beginning of June 2020.

The iPath Series B Bloomberg Grains Subindex Total Return ETN (NYSEARCA:JJG) holds futures contracts in the leading grain markets.

Corn, soybeans, and wheat prices remain weak

There are no guarantees that the 2020 crop in the US will be sufficient to meet the

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This article was written by

Andrew Hecht profile picture

Andrew Hecht is a 35-year Wall Street veteran covering commodities and precious metals.

He runs the investing group The Hecht Commodity Report, one of the most comprehensive commodities services available. It covers the market movements of 20 different commodities and provides bullish, bearish and neutral calls; directional trading recommendations, and actionable ideas for traders. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.

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