Unlikely bedfellows chill out together
Activity this week demonstrated that futures markets indeed look ahead to the future and not current conditions. Three disparate markets made reversals from sharply higher to near-collapse as weather forecasts included a warming in areas where extreme cold temps had led to buying.
Natural gas, now the major heating fuel in North America; hogs, boosted by shortage of eggs and poultry due to bird flu; and wheat, vulnerable to winterkill in portions of the wheat belt, all hit new highs mid-week but made simultaneous U-turns when warm weather relief was predicted.
Gas for March delivery exploded to a three-year high. April hogs jumped to the highest level in three months and KC hard red wheat tumbled by 30 cents per bushel from its highest level in four months to sharply lower in 24 hours. By midday Friday wheat and hogs stabilized and natural gas was resuming an upward bias.
DOGE chaos reigns on disappointed American farmers
A number of farmers who largely support the current administration are expressing frustration over issues that leave their futures in question.
The Kansas Farmers Union notes that the shutdown of USAID has cost farmers $2 billion annually in produce sales. Rhode Island farmers say that delayed government payments will cause a ripple effect when businesses and individuals relying on farm food will not receive sufficient shipments as farms fail.
Farm news sources complain about mistaken DOGE cuts: Firing bird flu experts and causing the government to try to rehire the vital workers as Musk helpers with no prior government experience make critical job cutting mistakes.
The Trump administration plans to vaccinate birds, but farm industry groups remain divided since vaccinated birds won’t be accepted in other countries who believe the vaccine only masks bird flu symptoms.
In addition the labor intensive vaccination injection process requires dealing with hundreds of millions of birds. All of these issues contribute to farmer worries as profit margins remain tight.
AI is in AgrIculture to stay
Artificial intelligence has the potential to affect farms in a number of positive ways.
BMP Magazine and other sources explain that, even today, AI sensors can analyze soil nutrient levels to help regulate fertilizer needs. Satellite imagery and AI in drones can monitor crop health in real time, measuring crop stress, disease and pest infestation leading to rapid response solutions to these problems. AI-driven irrigation systems allow for optimal water schedules, taking into account soil moisture, weather forecasting and specific crop needs. Advanced AI algorithms consider historical data, atmospheric conditions and climate trends to support farm crop growth. Crop yields can be estimated, commodity prices and demands can be fine tuned and AI-powered machinery can offer precise seeding, spacing and soil conditions in real time.
Obstacles to overcome for farmers include needed infrastructure with available internet connectivity and education for farmers to prepare for the rapidly advancing future.
CME midday prices: Price per bushel: March Soybeans, $10.40; March Corn, $4.93; March Wheat, $5.90. April Livestock per 100 pounds: Cattle, $194.30; Hogs, $88.30. Metals per troy ounce: April Gold, $2,953; March Silver, $33.09. March Copper per pound: $4.42. April Crude oil per barrel: $71.05.
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