We’re there or almost there with stopping Kansas City futures, taking the bushels and loading them on rail cars and shipping them up to deliverable Chicago elevators…….Is there enough time and are there entities out there capable and willing to use their facilities? Speculators might theorize and contemplate being long KC and short Chicago yet, it takes actual cash traders to execute what should happen…….and they’re not telling me their plans………………………keep an eye on receipts and shipments every day! Millers are the closest thing we have to modern day alchemists……..a little hard red here………., a little soft white there…..match the ash content…and eureka!!……………. A flour blend that meets the soft red wheat user’s need…………………
There are still a lot of soybeans in bins and bags throughout the country and there’s a real possibility of a record crop in Brazil……………………………..It’s nice to have a time out with China which might allow exporters to go directly from the US ports to China but, the world needs to find new demand to absorb the new supplies ………………………Upside potential might be limited as end users sense that record US stocks could stymie the urgency to take extended coverage………………………………Corn/bean ratios suggest fewer bean acres for the 2019/2020 crop year and we are still closer to the low prices for the decade rather than the highs so the speculative community could be more likely to be supportive on dips rather than sell into rallies…………………..Next big world powwow is in Davos in January………………………..
Corn has taken a back seat to wheat and beans the past few weeks……………Spreads are not at full carry despite excess stocks on the ground and basis levels suggesting that delivery is the best sale………………..Yet, we are not at levels where most of the speculative community is willing to initiate bear spreads………..We’re in corn limbo! End users still appear to be more willing to take extended coverage when nearby futures slip to 360 and below while producers and warehousemen appear to be willing to reward the market with cash on any basis pops or moves to 380 or higher in the nearby futures…………………corn purgatory…………………………………….
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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