It’s still out there and it’s looking for a place to stay…………………………..Harvest activity is expected to be brisk the next two weeks and corn and beans will be looking for bins and bags to spend the rest of the Fall and Winter……………………………..Yet, basis levels on corn firmed a little yesterday as some are saying that the producer is doing a marvelous job of cubby- holing it on the farm………………..Even with the smaller than expected production figures released by the USDA yesterday the final 20% of harvest might assert the most pressure on basis levels and spreads!!!!!!!!!
The USDA carryover estimates are still considered to be more than comfortable domestically! World ending stocks, by some, are still considered to be adequate to slightly tight especially for wheat……………………….Traders are focusing on the southern hemisphere as any hiccup with Australian and Argentine production may spark a sharp rally! Winter wheat seeding is approaching the date when producers will be reluctant to add acres, unless we return to the wide difference of the wheat/corn spread which we saw in early August and then it might be worth it to take a chance ………………….We still anticipate a healthy increase in winter wheat seeding but, the USDA doesn’t release acreage ideas until January 2019……………………………
All is well in the equity markets today as it appears that financial collapse because of slightly higher interest rates may not be as devastating as previously anticipated…………………..Historically, the last ten years of helicopter money and rapidly expanding money supply might be considered to be the outlier………………….There are some who remember the days when the money supply grew at a consistent pace and interest rates were determined in the open and free market but, that lessens the power and influence of those who have orchestrated money supply since the concern over Y2K………….Grain prices may have been influenced by monetary policy as cheap dollars and low interest rates might have been one of the reasons behind the very firm levels over the last decade. ……A policy of higher rates because of a stronger private economy might keep prices gravitating back to levels seen prior to 2008. …………………………………..Regardless, the less filling/tastes great arguments may continue through the midterm elections as market direction has meaning!
We are starting to enter the roll over period for November beans and then we’ll start feeling the December roll and Holiday atmosphere as we approach the end of the year……..Over all the sense of the market, in my opinion, is that grains are too cheap to sell yet there’s no reason to buy, yet!
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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