One month left in the calendar trading year and we’re still near levels which may be viewed as too cheap to sell yet there’s no urgency to buy………………………..Spreads are wide enough to reflect the comfortable situation the world is in for soy products and feed grains yet, wheat spreads may have some play in the inter and intra markets as we sense that Kansas City remains undervalued to Chicago and basis levels suggest that Chicago wheat spreads may flatten yet, given the vomitoxin variable and no guarantee for non contaminated stocks some end users are reluctant to trust the contract………………………..Happy Hanukkah on Monday!
It’s that time of the year when most of the trade focuses on South American and Australian weather as wheat harvest accelerates and corn and bean development reaches critical stages…………….We still look at our weather as winter kill may occur with wheat if there’s no snow cover and temperatures drop to sub minus 10 F for a couple of hours………Typically, winter wheat gets damaged in the late winter and early spring with heaving as thaw and freeze works the roots a little higher and more exposed……………..So, Buenos Aires is our focus this weekend and Brazil/Argentina/Australia will take the majority of the market’s focus for the next two to three months………………
The December 11 crop report typically is a non event yet the USDA has to be respected as they surprised us last month by incorporating the Chinese Census results in the supply/demand calculations………..The big report comes in early January as the USDA releases the final production figures for the 2018/2019 crops as well as stocks in all positions as of December 1, Winter Wheat seeding for the 2019/20120 crop and Supply/Demand projections for the domestic and international markets.
The exposure from political happenings remains large!……………………..Russia may be feeling the pain from lower crude oil prices and apparent weakening influence in the European and Middle Eastern theaters and, in the past, this has brought about some squirrelly happenings and situations which could be traced back to specific players………..A trade pact with China is the ultimate goal of the US involvement in the G 20 meeting yet, as of this writing, that attitude is that tensions may escalate as China has used its currency to negate the impact of tariffs and they may continue with this plan which may cause the US to increase tariff rates………..We hope that diplomats work around these issues and that unicorns and rainbows appear on Monday morning……………………………….
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
312 985 0156
888 391 7894 toll free
312 256 0109 fax
sbruce@walshtrading.com
www.walshtrading.com
Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.