Traders are talking about the possibility of higher incidents of field loss in beans and corn as Mother Nature appears to be less cooperative as the weather forecasts are suggesting wetter than normal conditions prevailing for the next two weeks……………………………………………Over all, we have been fortunate, to date, with extremely beneficial rain events yet, a week or two of dryness would be welcome in order to gather in a large chunk of what’s left in the field………………………………………Traders realize that it is only early October and we are ahead of the 5 year average pace so there’s no need to panic……………………………..yet!
We still sense storage tightness as the basis has been very weak in many areas where off farm storage is scarce given the reports of phenomenal yields specifically on beans…………………………………………….Moisture is always a concern at harvest and elevators and warehousemen price themselves accordingly with cheap basis levels and drying charges to ensure themselves that things won’t be that detrimental if condition becomes an issue when we start warming up in the late Winter and Spring………………………………………………….There’s still a lot of crop to get harvested and the trade will be weather focused for a few more weeks………………………………………………
Wheat seeding is chugging along and, as with corn and bean harvest, moisture is a headache yet, winter wheat producers could always broadcast seed instead of drilling……..but, we are weeks away from entertaining those choices………………………………………………Quality concerns with Black Sea origin is still being bantered in the trade which makes the southern hemisphere quantity and quality more newsworthy in the coming months…………………………….Wheat appears to be in a holding pattern waiting for fresh input…………………………Overall, in my opinion, the world stocks to use ratio is historically low and a weather scare in Argentina and/or Australia might spark a solid rally as end users/millers sense much more upside risk and downside potential…………………………………..
Crop Report next Thursday…………………………………………………………..It’s the USDA ..respect them and expect the unexpected!
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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