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Heat wave fuels more volatility in the commodity markets

An ag economist says this week’s heat wave could add more volatility to commodity markets.

Dan O’Brien with K-State says soybeans are the most vulnerable since they’re in the reproductive stage and that could push prices higher. “If there’s significant risk of yields going from 50.9 bushels per acre down to 50 down to 49 something or 48 on less acres on the bean side, there’s less room to absorb much production cut back without having to ration usage.”

He tells Brownfield corn is a different story. “We have to go all that much deeper and into yield reductions to actually get the supply and balance sheet to start to get down to, say 2 billion bushels or down less than that, 1.5 to 1.7 to where you’d really start to see explosive prices.

O’Brien tells Brownfield wheat prices will continue to struggle. ”Wheat from Europe, if not other places, have been cheap enough overseas, with currency differentials actually coming in to the US and competing for exports.”

He says producers should consider selling some of their 2023 old crop on smaller rallies to prepare storing this year’s crop.

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