Grains may start getting more interest in the trading community next week as the reality of growing season is here and the potential exists for some production problems as the northwestern third of the Heartland is very soggy and the fear of planting delays and/or loss may spark a premium for the rest of the season. It is the last week of the month and quarter and we do have major reports being issued on Friday so the planets are aligning and the stage may be set for some possible short covering from the fund community. Eastern Producers might take advantage of a move to $4.20 CZ and above to sell a little new crop and/or a move above $5.50 WN. Traditionally, eastern soft red producers relinquish title to the crop at harvest as few like to deal with wheat on the farm. Yet, a move to $5.50 and above might entice them to forward contract a portion of their anticipated production. Beans are the last chance to use the land if we have planting delays. Typically, they are the last to rally.
Basis levels and spreads still suggest that there are more than comfortable supplies of corn and beans. Some old crop stocks may be under water in the west yet those will move the fastest once we dry out………….and we usually do……………Wheat basis levels and spreads still suggest a concern over quality and/or quantity. Friday’s stocks report is important and it might reveal the reason for the staunch basis! Or not………it’s the government and they might not find the relevant detail until later reports………..yet, the cash market suggests that something is askew somewhere.
Sunday night might be busy as we are becoming a weather market!
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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