It appears as if “Anything Goes” as we approach corn and bean harvest, wheat seeding, mid-term elections and new trade deals with Canada, China and others………………….We are a week away from the USDA Production and Supply/Demand estimates for conditions as of September 1 …………………. Some crop tours have suggested that the corn crop is close to the August USDA figure and beans are higher than the August figure……………………………
According to the state by state crop reports the corn and bean crops are ahead of schedule and, weather permitting, we’ll be deep into harvest by the end of the month…………..
It could be argued that politics and posturing for trade deals have impacted price action this past month and might continue having a big influence……………Russian/Black Sea export license yes/export license no?……………Argentina tariffs? ……………..October surprises ahead of the election?…………. There is more to consider than just harvest/seeding weather!
There are those who consider that the markets are on the lower end of the last decade’s price range and awaiting the seasonal harvest hedge pressure to pass before a rally can materialize and there are those who think that the grain markets because of quantitative tightening have returned to the “normalcy” of the early 2000’s when $4 corn, $6 wheat and $9 beans were expensive……………less filling/tastes great!………..
Assuming that the most recent reports and estimates from the USDA on the subject of on farm and off farm storage space are accurate it is anticipated that space will be snug this Fall and Winter which may have a negative impact on basis levels and spreads in the corn and bean markets………….
Steve Bruce
Walsh Trading
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