It’s starting to look like it’s not going to be a cake walk with harvesting corn and beans………………………Wet today and the radar shows systems coming in every few days and then the National Weather Service in its 6 to 10 and 8 to 14 day forecast suggests that the western half of the corn belt might be cooler than normal and the eastern half a little warmer than normal but, all of the belt is expected to be wetter than normal…………………………………….Apparently, it’s not going to be easy to bring in the rest of this bumper crop of 2018/2019 and to seed the 2019/2020 winter wheat crop.
Yet, the macroeconomic factors such as monetary policy, trade pacts and agreements, central bank wheelings and dealings and stock market fluctuations have been larger factors in price fluctuations in our markets and we have been and could be flooded with many changes in these factors in the next few weeks……………………………..We have to stay on our toes!
Market movers; weather, Washington, USDA reports, tsunamis, nuclear catastrophes, volcanic eruptions, political machinations, Brexit and Iranian sanctions and the list goes on and on…………………We are at decade lows pricewise yet the decade was one which we printed money at an extremely high rate with the quantitative easing approach to economic growth and the flood of funds may have been a factor in pushing grain and oilseed prices to the upper stratosphere…………………………………………….The Federal Reserve has stated that it wants to lighten up on the money pumping and continue with a quantitative tightening approach………………….We have to wait and see because what we’ve seen before is that politicians and bankers tend to revert back to the printing press if too much pain is felt or perceived! We’ve gone down the rabbit hole in the USA as political forces have generated some very unique points of view and possible solutions and it appears that we haven’t seen the end of them as we approach the midterm elections on November 6…………….
The USDA issues its October production and supply/demand reports next Thursday and the trade might be thinking that there will be limited changes from the September numbers as we haven’t achieved enough harvest results……………………………………………….Always approach the USDA figures with respect and caution as one division of the USDA may pull a “Crazy Ivan” move any time………………….We have reacted negatively to bearish surprises in the last few USDA reports……………………….The past does not predict the future when it comes to government reports…………….Please approach with caution!!!
Harvest headaches might produce wet corn and beans which usually get marketed quicker as there are concerns over the condition later in the season………………………Usually, spreads remain on the defensive as basis levels remain weak and discounts get large…………………………………………….Mother Nature is the best dryer of grain as there is usually a better chance of “hotspots” developing when relying on the consistency of mechanical drying…………………………….Hopefully, the weather turns a little drier next week and all will be well………………………………………………..Yet, if we don’t price action in the last half of October will be interesting!
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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