Here's a look at futures prices on commodities that impact Southern Illinois and the rest of the Midwest.
Floods across corn belt
A massive storm swept from Colorado into the Midwest, bringing hurricane-strength winds and blizzard conditions to the western half of the Corn Belt. As the storm moved east, the snow shifted to rain, bringing floods as water overwhelmed frozen fields and rivers.
While this extreme weather affects everyone in the area, farmers see some of the worst effects. Blizzard conditions and flooding can kill cattle and hogs, and the water-soaked fields may persist for weeks, preventing Midwestern farmers from being able to plant a timely spring crop. Planting delays can lead to lower crop yields or even force farmers to give up planting some fields, which could cut into U.S. corn production this year.
For now, there is still hope that farmers will get into their fields next month to begin planting, but ongoing cold and wet weather could lead to major problems which could boost prices. As of midday Friday, this fall’s corn crop, represented by December futures contracts, was worth $3.95 per bushel.
Brexit delay on the way?
The future for the United Kingdom and European Union became muddier this week after the British Parliament voted against the current EU proposal and the more extreme “hard Brexit,” instead asking for more time to negotiate.
This delay boosted the British pound to a nine-month high near $1.33, as traders fear the “hard Brexit” more than anything else.
Spicy pork market
Pigs are flying higher this week after China made massive purchases of U.S. pork. The U.S. and China are moving ever-closer to a trade deal, and China is desperate for pork due to a disease ravaging its hog herds.
The highly contagious African swine fever (which does not affect humans) has swept across China and has likely wiped out a substantial portion of China’s hog production. Official statements regarding losses are believed to understate the issue, but private estimators are expecting that the disease could wipe out over a third of China’s supply.
China is the world’s largest pork producer and consumer, and the disease is beginning to force the Chinese to buy foreign pork, including U.S. meat, even as trade-war-related tariffs are in still in place.
This buying and expectations for even more after a trade deal is cut have caused U.S. hog futures to explode as much as 30 percent higher since late February, pushing most futures markets to contract highs.