Now that the reports are out of the way it’s time to focus on weather and harvest/seeding as well as the potential for trade pacts and policy shifts…………………….The next report is scheduled for October 11……………………………………………………………….
Going into the reports today the average trade guesses for stocks as of September 1, 2018 was about 400 million bushels of beans, 2.0 billion bushels of corn and 2.350 billion bushels of wheat. The numbers: 2.140 billion corn, 438 million beans and 2.378 billion wheat…………………..
The Small Grains Summary presented a few tidbits of interest like Soft White Winter Wheat at 216 million bushels compared with 2017’s 203 and hard red at 662 million and soft red at 286 million……………..Illinois soft red acres jumped to 560,000 acres from 470,000……………..Kentucky still has acres to plant as they harvested 300,000 this year compared with 310,000 in 2017 and 400,000 in 2016……..There is room to seed in Michigan as we only harvested 470,000 acres this year and 570,000 in 2016…….Ohio was 450,000 acres this year and 435,000 in 2017 and 560,000 in 2016……………………..We still sense that we will see additional acres seeded this Fall
We’re now in the last quarter of the fiscal year and grain and bean prices are closer to the lows of the last decade than the highs…………………………………………….We have been told by our Federal Reserve that they are expected to continue with a quantitative tightening approach to money supply…………………………………………….Corn and bean carry over figures for the 2018/2019 marketing year are higher than what they were projected last year…………………………………..Wheat stocks/use ratio is still considered, by some, to be a little tighter than normal……………………………………………The world trade/economic climate is always at the edge of the cliff given BREXIT, NAFTA, central bank implosions and other black swans that might appear…………………………same old/same old………………………………
Nearby Wheat vibrating around $5.00 +/- 30 cents, Corn $3.60 +/- 20 cents, and Beans $8.50 +/- 50 cents appears to be the comfort zone for a couple of weeks as we wrap up harvest and seeding and then deal with southern hemisphere wheat harvest as we approach the holidays…………………………We sense that end users are reluctant to chase rallies yet more than willing to extend coverage if we break back to the lows made in early September……………………………some traders are sensing that we’ll need to get 80% complete with corn and bean harvest in order to re-evaluate their patience…………………………………………Storage space is dear and basis levels have had a tendency to be on the defensive which brings about wider spreads…………………………………..
Steve Bruce
Walsh Trading
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