In Wednesday’s Newsmaker, we heard from Benjamin Kasch and account executive for Bower Trading on why we should still be optimistic about the future of the agriculture markets.

COVID-19 has turned agriculture upside down and that includes commodity markets. Benjamin Kasch (Cash) is an account executive for Bower Trading of Lafayette, Indiana. He says COVID-19 has made things more difficult for the agriculture industry, which was struggling long before the outbreak began.

“That makes farmers rethink what this means out ahead for their livelihoods, their profitability. Right now, a lot of these commodities are not profitable. Some of the market systems are broken, the chain of supply has to be shifted to where the demand’s at now, away from restaurants and towards the retail counter at the grocery store, so that’s what we’re working with.”

The COVID-19 lockdown has even affected overseas markets as well.

“We are opening up some of the economy, as well as just trade overseas. We’ve been on lockdown globally. That’s really changed some trade flows, but here, as far as the Midwest goes, we’re really concerned about this corn market. The ethanol industry is basically at a halt, looking for any kind of uptick here in demand or future demand, which just hasn’t come. We’ve been hearing reports that ADM is keeping a couple of plants shut down up to four months, which is quite concerning.”

The market is keeping an eye on early-season weather challenges that could mean higher prices in the future, especially when it comes to wheat.

Kasch says this is typically the time when markets drift lower in good years, let alone tough ones. That’s not a good thing because a lot of old crop commodities are still in storage on farms across the country. Kasch says the market is keeping an eye on early-season weather challenges that could mean higher prices in the future, especially when it comes to wheat.

“We have dryness that’s been persisting in the western Central Plains, including eastern Colorado, western Oklahoma, western Kansas, high-producing wheat ground out there that has been showing up in the drought monitor, and in the forecast here for the next two weeks is below-normal precipitation. This is when that crop is made for most of Oklahoma and Kansas is the month of May and the precipitation looks pretty limiting there.”

There are some early-season weather concerns overseas as well that could possibly lead to higher prices down the road.

“Russia, they have some dryness that’s been sticking around on their wheat crop. They put an export cap on their exports until July first to help secure food and flour for their people. And then Brazil’s corn crop now that nobody seems to be talking about, 50 percent of that’s dry, and that’s been the real burden for the U.S. corn exports early on was just the large corn crop last year. Now, it’s getting hurt this year and nobody’s really talking about it, so that’s something that could spark this corn market up down the road here and maybe some of these global buyers will come in and start stockpiling corn.”

He says decent export reports and inspections are helping to keep the price of corn above three dollars. In spite of the negatives, Kasch says there are some bullish factors out there to keep an eye on.