Field reports are getting more promising as the corn and bean plants are enjoying the growing degree units and abundant top and sub soil moisture. The question remains as to how long the growing season lasts but, assuming a normal end to the growing season there’s less concern and anxiety every day. It appears that we could be seeing a trading range for the next month as the August 12 crop report with the advertised acreage revision(for real this time we hope) as 420 CZ might attract some prudent end user buying and 450 could entice some producers to sell.
Wheat is enjoying the heat and dryness. Northern Ohio and Michigan might squeak out a decent crop as harvest activity intensifies the next week. Basis levels have been historically strong and we’re keeping a close watch on them as the indicator of quality. The Thursday report is anticipated to show little change from June with quantity produced. Spreads are sensitive but it appears that we may have enough quality stocks to keep the market satisfied through March. Long hedgers might think about placing long hedges there while elevators and any producer willing to take the chance to store wheat on the farm might consider keeping shorts in the September and/or December contracts. We are keeping a close eye on Kansas City/Chicago as there are technical signals that Kansas City may start strengthening. It’s been strange and bizarre as we’ve seen that spread achieve historic weakness. There are gremlins in the wheat market! We could see a major shift in acreage this Fall as it’s more profitable to plant corn and soft red wheat than to seed hard red.
Beans are still the last thing to go as they usually are an August crop. The acreage report is extremely important and we could be range bound until the report unless the weather turns hot and dry or cool and wet. The Monday crop condition and ratings reports are very subjective. There’s a lot of time to change for the better.
What ever happened to all of the hubbub over Chinese tariffs and the trade war? If they have the money then someone in this world will sell to them which leaves the rest of the world available to us to supply. Yet, it seems that the market has known that all along!
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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