Some forecasters are calling for a frost next weekend in the northern Midwest which, if occurs, is a few days ahead of normal……………………………………Some farmers might welcome the frost as weeds will become less of a nuisance with harvest…………………………………………………..The National Weather Service is also calling for wetter than normal conditions to prevail which might impede harvest activity yet, lessen the probability of a frost………………..
On September 28 the USDA will issue its stocks-in-all-positions report as of September 1 as well as its small grains summary…………………………It also is the end of the quarter and in years past we have experienced a tendency for the large speculators to try to tweak the market in their favor……………………Yet, as of this writing open interest in the grains is at historically low levels which could suggest that there is less incentive for the speculative sector to push grains one way or the other…………….
It’s my opinion that Washington and the weather are the 2 major market factors which will impact prices for the next month as we head into the midterm elections………………………………………The outcome of which might have an impact on our trade deals with Canada, China, Mexico and others which will have a major impact on price performance in grains…………………………………….
Harvest action the next few weeks will determine just how quickly , in my opinion, corn and beans find a bottom…………………………………….Recent USDA reports suggest that off farm storage will be very tight and if production increases, as the history of the last twenty years suggest it could, there could be very creative storage innovations and adaptations in our future……………………………………………………….Regardless, tight space typically suggests lower basis levels and wider spreads through the late Winter and early Spring when everyone is hustling to have all inventory in a bin…………………………….
We will continue to monitor winter wheat seeding as the economic incentive continues to suggest that acreage will increase…………………………….Mother Nature always has a say so………………………….
End user buying interest is increasing sub 350 CZ and 825 SX yet, I believe, there is no urgency to chase rallies until harvest approaches completion……………………………….Patience!
Steve Bruce
Walsh Trading
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