There’s just no urgency to add to longs to cover needs on any grain or oilseed right now! Speculative selling has been pushing wheat lower as new crop prospects are neutral to good given the moisture passing through the Plains and Midwest and the market is still feeling a little pressure from Black Sea movement before the onset of winter………………………………But, there have been issues with the Argentine and Australian crop and the potential for sharp and wicked rallies still exists until we are assured of solid production in the northern hemisphere and that might not be felt until March and April of next year…………………………traditionally, we should anticipate a couple of winter kill threats/realities and given the historically tight stocks to use ratio and anticipation that hedge selling emanating from the producer at these prices and at this time will be limited then rallies may be fast and furious……………………….Things could get very interesting if and when millers and importers get the urge to own………………………………………Yet, corn and bean harvest pressure might have aided the recent bearish attitude in wheat and we anticipate that perceptions may change once the last bushel of corn and beans gets put away for the Winter…………………………………The soft red wheat crop was below average quality this year as test weights and falling numbers were wanting……………We continue to monitor the basis for signs of end user interest in acquiring good quality stocks…………………………..
The market may still be concerned with the end of harvest, the election, the November crop report, December deliveries and then the end of the fiscal year………………………………………….of course, southern hemisphere weather is very influential…………………………………….And, trade policy, specifically with China has been a market influence……………………………….There are only 38 full trading days and 3 holiday shortened sessions left in this calendar year and we all learned from watching “Trading Places” that markets may get overly jumpy and volatile during the holidays and move more irrationally than usual………………………Be prepared!
Basis levels have bounced in areas where harvest is complete yet, levels are still below where they were last year for corn and beans and this suggests that we might still see weakness in spreads especially in corn and the products as we approach deliveries…………………………..,
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.
Steve Bruce
Walsh Trading
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