Commentary
It is my belief that weather trade positioning ahead of the three-day weekend drove the market today. Corn futures rallied double digits with the Midwest weather models showing 15 days of dryness for at least 75% of the corn belt. The USDA says it will produce its first G/E ratings for the US on Tuesday. The basis chart shows spot futures are trading about 35¢ below Midwest cash. A big reason why July corn has rallied above $6.00 and has traded back up to a 75-cent inversion versus new crop December. On the flip side export sales are clearly lagging. Export sales released on Thursday showed net old-crop sales reductions for a second straight week. It is my belief that Brazil’s ’s record crop will be undercutting U.S. corn on the global market with ample supplies coming when the combines start in Brazil’s major producing regions to roll in a few weeks. Meanwhile, the new-crop US production outlook seems promising so far, with early plantings and increased acreage pointing to a large crop should weather cooperate. Lack of demand amid weather unknowns in a supply side driven market could keep the market supported near term. However, without a weather premium longer term, producers in my view should be looking at the latest new crop rally as a gift. I will provide some specific hedge recommendations on my written pieces next week as well as on my webinar next Thursday. Happy Memorial Day weekend to all!
Trade Ideas
Futures-N/A
Options-N/A
Risk/Reward
Futures-N/A
Options-N/A
Please join me for a free grain and livestock webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts. Sign Up Now
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was 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 market prices .PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.
Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604