Looking ahead the wheat market gets to decipher the stocks report on September 28 and then the Supply/Demand estimates in October, November and December and then the mother of all reports in January 2019 when we’ll get the final production figures, supply/demand, stocks in-all-positions as of December 1, 2018 and winter wheat seeding…………………………………………….
We’ll also work through the potential variable storage rate calculations going into the December deliveries and at this point, there’s no need to change the storage rate…………………………….
What is most important is the reality of harvesting the southern hemisphere crop as Argentina’s gut slot is in December and Australia takes in the most in November and December. Also, we are entering the busy time with winter wheat seeding in the USA and with the recent re- widening of the wheat/corn and wheat/bean spreads has reawakened the incentive to consider seeding winter wheat in the Southern Heartland and Mississippi Portal (Farm Resource Regions/Economic Reporting Service)……………………………………
Most elevators and warehousemen in the Heartland tend to focus on bean and corn harvest from the latter half of September to December and some refuse to even consider handling wheat until the new year………………..this might suggest that there will be little to no harvest/farmer selling pressure in old crop but there will always be the possibility that producers take advantage of the premium that wheat has to corn and sell anticipated new crop production……………………………………….
First frost in Northern Illinois traditionally occurs in the from October 5 to 15 and the corn and bean crops are reported to be a little ahead of normal development which suggests that most of the crop in the Heartland will be undamaged when a frost ends the growing season…………………………..
There is still a race for space as producers are seeking safe storage for corn and bean production and with over 90% of the crops still to be harvested end users appear to be comfortable waiting to see how harvest hedge pressure plays out………………………………………………
In my Opinion politics are still in the fore front and the talk about pacts and tariffs with China, Mexico, Canada and others have and will spark market reactions……………………………..
Steve Bruce
Walsh Trading
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