Hopefully, we’ll be talking about a new trade agreement with China next week as it is nice to see the USDA announcements this morning of bean sales to China and corn to Japan………..We need to get a move on as the weather in South America is still very good and the bean crop in Brazil has the potential to be very large……………………We will also be looking at our Federal Reserve for indications of tweaks to monetary policy…………………………The political happenings in Europe and the power struggles in DC have had an impact on the grain markets and we must continue monitoring the situations….Hopefully, peaceful solutions will be found!
It is the last half of the last month of the calendar year and silly and goofy things may happen just because someone may need to do something for an unknown or unfamiliar reason…………….Ample corn and bean stocks and the desire to move stocks stored outside before the onset of Spring might keep spreads a little on the defensive and more likely to widen……….We’ll need a massive new buyer in the world to shake things up to spark basis levels and move interior bushels………This appears to be unlikely! Wheat is still the most likely grain to become more volatile as Argentina is reporting a little disappointment with its wheat crop given the frosts in November and speculative shorts might get a little religion as we approach the winter wheat seeding report in January………We still sense that hard red wheat acres will be noticeably smaller that desired which might spark more interest in the KWN/WN spread.
Flat price is still closer to the decade lows than highs yet, a lot of the rally ten years ago could be attributed to the helicopter money strategy by the Federal Reserve and it appears that those days are gone……………………….Regardless,the crusty old timers may sense that nearby corn between 360 and 400 is in its”happy place” and nearby wheat may enjoy the same state of being between 480 and 560……………Beans are a different story as there world stocks are comfortable….But, 850 may be too cheap and 950 too steep!
Traders are going into the weekend cautious of the unrest in Europe!
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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