Posted on February, 21, 2025 at 08:43 am
The grain and livestock markets are experiencing increased volatility as extreme outside market forces continue to influence price action, according to Mike Zuzolo of Global Commodity Analytics.
Heading into the midday session, soybeans lead the grains, trading as much as 11 cents higher. Feeder cattle lead the downside in livestock, trading $2.50 lower.
“It seems to me that … we may be getting into a volatility time period here because of these extreme outside market forces,” Zuzolo said.
He noted that market factors have become more condensed, leading to sharper price swings.
“I’m noticing here in the past couple of weeks that we’re seeing an even greater whipsaw price action and … the saw teeth are getting bigger and bigger as far as daily ranges,” Zuzolo said.
He pointed to significant fluctuations in wheat, soybean, and corn markets, with ranges of 20 to 40 cents in soybeans and wheat and up to 20 cents in corn.
Zuzolo advised his clients to prepare for market conditions similar to those experienced during summer weather rallies, emphasizing the importance of staying ahead of price swings in the coming months.
Recent cold weather across the Southern Plains and Black Sea region has added another layer of uncertainty to wheat markets.
“It’s been interesting because Russia and Ukraine and the Black Sea areas and us here in the Southern Plains and hard red wheat belt have had almost an identical type weather pattern where it’s been relatively dry and extremely cold,” Zuzolo said.
While weather remains a key factor, other global influences are also shaping the wheat market. Looking ahead, Zuzolo highlighted the potential impact of tariffs set to take effect on April 1, which could further drive market movement.
In the livestock sector, traders are awaiting the upcoming Cattle on Feed report.
“Cattle on feed numbers are going to mean everything to me. Are we close to 11.7 million or 12 million head? If we are, there’s an ample supply out there,” he said.
Source: Rural Radio