Grain Spreads: Damages

Sean Lusk General Commentary Leave a Comment

Commentary  

Front month grain contracts took the brunt of the selling today as terminal outages in Louisiana due to the Hurricane potentially gave thoughts to decreased near term demand. Power outages in the U.S.’s busiest AG port raised concerns  about supplies building with nowhere to go. Sep 21/Nov 21 beans which were trading at a 40 cent inverse just days ago, traded back to parity today. Sep 21/Dec 21 corn traded from 7 cents inverted to a 7.2 cent carry today. Coupled with harvest pressure the storm damage added to the weakness seen in Corn and Beans today in my opinion. Wheat was no exception either as Sep/Dec Kc traded to 9 under. Quietly ,Chicago Sep/Dec wheat has pushed to a 13.2 cent carry.The continued deterioration of available quality global wheat stocks may potentially push some additional export demand to the US later in the year, but for now big jumps on the FOB values on basis due to the gulf issues, wheat maybe pricing itself out of the export picture to make room for corn and beans at other ports. Having said that if the port shutdowns are back online sooner, the market could quickly recover this week’s losses. Two big reports next week with crop conditions on Tuesday evening and the USDA WASDE next Friday at 11 am. The trade will get updated estimates on  whether the 2021 crop is getting bigger or smaller in my view. The June lows for beans and corn are at 5.07 and 12.41 respectively. Those will be downside targets should pressure to the downside remain fro Dec Corn and November beans in my opinion.

Trade Ideas

Futures-N/A

Options-N/A

Risk/Reward

Futures-N/A

Options-N/A

Please join em for a free grain and livestock webinar every Thursday at 3 pm 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 not 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

slusk@walshtrading.com

www.walshtrading.com

Walsh Trading

53 W Jackson Suite 750

Chicago, Il 60604

Leave a Reply

Your email address will not be published. Required fields are marked *