In the micro-economic world domestic corn and wheat stocks are tight while bean stocks are plentiful. In the macroeconomic world as money supply tightens there’s less urgency to chase any rally in anything as it appears that we are still deflating from the easy money years of 2008 to 2016 when every trader bought dips and made money in everything from asparagus to zucchini. It’s a little different when money gets meaningful………………………………………..Fundamentals matter!
In the little world of grain trade within the financial universe there is a lot of constructive factors which might keep prices from going much lower or, at least, the rate of descent much slower……………………………The recent surprise from the USDA with adding the revisions from Chinese census estimates of the grain production and stocks might be a factor which curtails some bullish sentiment as world stocks are in much better shape, on paper, than they were one month ago. Yet, China is an importer and is still very capable of importing grains and oilseeds at an increasing rate……………………………..Hopefully, a trade pact revision is negotiated by the end of the month when the world comes together at the G-20 meeting………………………………………
The December roll might be the major market factor over the next three weeks and basis levels suggest that we might see healthy deliveries against the corn contract while the jury is out on wheat and products………………………………
The 2019 crops are sneaking up on us and we are presently at levels which are not getting producers excited to hedge ………………………………..Nor are we cheap enough to get feeders and millers willing to take extended coverage…………………………………………………..We may be settling in the a holiday trade mode which, historically means leaking a little lower every day if weather problems do not develop in the southern hemisphere…………………………………………….
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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