We close early on Monday and celebrate Christmas on Tuesday…………………………….Merry Christmas!
Government services at 70% of normal next week, or not, we’ll still be open and will survive even if we do not get government reports……………Remember that we started to keep tabs on export shipments back in the early 1970’s after we oversold our soybean crop and became an “unreliable supplier” to certain clients which decided to make sure that the supply line stays full and focused on developing Brazil and South America as additional suppliers………….The world survived before the USDA, FGIS, and other XYZ government entities and we will adapt! Keep an eye on basis levels as the cash market reflects the near term supply/demand situation and keep an eye on the weather for crop potential and/or worries……………Working around USDA opinion and validation could happen and we may find private sector solutions for score keeping……………
As we close out calendar year 2018 the trade may be focusing on the increasing cost of capital and South American weather………..we may have incorporated all the news with the financial panic this week yet, we see no reason to chase a rally in grains as we are still at a very comfortable stocks to use ratio for corn and beans……………Wheat….not so much! Farm income is at 12 year lows which may de-incentivize acreage increases and production this Spring………….We sense that end users may become more serious with extended coverage with nearby corn approaching 360, nearby wheat at 500 and nearby beans sub 840……………
The big numbers may not be coming on January 11………………What do we do if we don’t receive winter wheat seeding estimates from the USDA? What if there’s no stocks-in-all-positions as of December 1? What if there’s no final corn,bean and all wheat production figures? Could we find the answers to winter wheat seeding with satellite imagery? I’ll go out on a limb and say that we have enough corn and bean stocks to get us through this crop year and into the next as basis levels suggest more stocks than storage space…wheat stocks may be a little more squirrelly as basis levels suggest tightness with certain classes………..Regardless, we’ll survive and price discovery will go on………………….
The information contained on this site is the opinion of the writer and obtained from sources cited
within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in current market prices.
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Steve Bruce
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