Funds continue to stay in their short position in grains. End users have taken coverage for a couple of months while producers remain the chief long. It’s a stalemate as we might have to wait until harvest in wheat to see which side is right. Producers might be selling at harvest but, they’re not going to lock in a loss right now. As for corn and bean planting there’s no reason to panic nor be overly concerned with the damp conditions. We’ve got a couple of weeks to dry out and even though it’s tough to plant in mud the replenishment of the subsoil reserves are a blessing. If they aren’t beneficial this year they will be beneficial next year. Rain makes grain! And, we’re not planting with oxen or horse driven machines anymore. We can get a lot in the ground in a short period of time.
Problems typically develop with wheat at harvest. If Mother Nature doesn’t cooperate with windows of harvest opportunity when the crop is ready then quality problems ensue and the cash market uses basis levels to attract and position the good stuff. We could use a good quality wheat crop in all classes and in all growing areas of the northern hemisphere this Summer. If not, and we’ll have to live through harvest, we might see a very inverted spread market. Wait and see!
Funds are comfortably short. End users are comfortably covered. Producers are behind the eight ball as there isn’t much enthusiasm nor funds to plant a lot of corn, beans, spring and durum wheat or to sell any winter wheat before knowing the quantity and quality. When we make a move we might be sharp and quick. We’re keeping an eye on the weather forecasts 24/7!
End of the month position squaring and the Stocks-in-all-Positions and Prospective Plantings reports to be released on March 29 may spark a little trade beforehand. The weather and Mother Nature might have a little more say so than the USDA as per what gets in the ground and when it gets in the ground.
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.
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