Analyst: Sandy’s impact on grain markets, drought minimal
November 2nd, 2012
Omaha, NE – Superstorm Sandy has claimed at least 98 American lives as of Friday morning, and racked upwards of $60 billion in total losses, according to forecasting firm IHS Global Insight. But will the storm’s impact stretch to the Midwest?
Superstorm Sandy showed it could have an impact on the grain markets, but it is likely minimal. Darin Newsom, DTN Senior Commodity Analyst, said most trading was shut down before the storm. The uncertainty led to investor liquidation on Monday, he said, but the markets stabilized on Tuesday after Sandy weakened as it moved farther inland.
“This storm itself was so massive, yet the reaction by the market was short-lived,” Newsom said. “Yes, there’s going to be long-term effects all along the east coast. But from a market perspective, it’s already moved on.”
Newsom added the storm didn’t reach the heart of the nation’s growing areas, so it likely won’t ease concerns over the ongoing drought. “What I see from say the Nebraska point of view and other parts of the Midwest is that they just aren’t going to get anything out of this,” he said.
“This was a major, major weather system that just simply could not push far enough west to start to relieve some of the drought conditions,” Newsom said. “And therefore the questions linger about what kind of winter we are going to have leading into our spring planting season.”
The U.S. Drought Monitor released last week shows 80 percent of Nebraska still suffers an “exceptional” drought, the worst on the four level scale. That will likely continue. The latest long-term forecasts for the Midwest still call for lower temperatures and decreased precipitation.
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