The crops are still there! A little rain delay and the lack of hedge pressure may have been one of the reasons for today’s bounce in corn and beans and weakness in wheat as Mother Nature is delaying and providing with the moisture in the Midwest and Plains………………………………………………..We have experienced a nice recovery in grain and bean prices the past two weeks as we might have seen some short covering ahead of the end of the quarter on Friday but, in my opinion the bull needs to get fed every day and unless it continues to rain and keep the combines out of the fields harvest pressure might bring us back to the lows made in mid September……………………
Corn harvest was put at 16% complete and bean harvest at 14% in the Monday afternoon USDA progress reports and that means that there’s a lot more ready to get picked and combined and find a home for the winter………………………………………………………….Pasture and Topsoil conditions are being reported as conducive for crop development with pastureland rated at 76% good to excellent and topsoil amounts at 72% adequate to surplus……………………………………………………..
Domestic production and conditions appear to be more than adequate yet there remains a concern over the situations in Australia and Black Sea wheat growing areas……………………..There was some talk about the impact of frost in the Canadian Plains but it is September 25 and we are at normal first frost dates so any reaction to a frost is an over reaction…………………………………Traders are looking at the forecasts of a first frost in The northern Midwest yet according to the USDA 72% of the corn crop is mature which compares to last week’s 54% and last year’s 53%………………………..so there might be some localized problems if a frost hits this weekend and early next week but, overall, it’s not news!
That leaves the market looking at the trade pact and tariff talks and an attitude that nothing will be hammered out until after the midterm elections on November 6…………………….And we will also get our November production and supply/demand reports on November 8 which is what we’ll have to deal with until the final figures set to be released in January 2019 as well as the winter wheat seeding figures…………………………………
We will be given the Small Grains Summary this Friday at 11:00 am Chicago time as well as Stocks-in-all-Positions ………………………………………………………..Please, respect the USDA as surprising figures have been released in previous years and have had an impact on price performance on corn and beans but, more so on wheat and oats ……………………………………………………………………………………
Steve Bruce
Walsh Trading
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