Looking Ahead

Steve BruceGrains

                                Southern hemisphere weather, Federal Reserve policy and  geopolitical happenings might be the focus of the grain markets for the next month…………….The January crop reports(the Mother of All Reports)  is set be released on January 11 at 11:00 Chicago time! The USDA is scheduled to release the final production figures, grain stocks as of December 1, winter wheat seeding and supply/demand estimates……………..We  trade supply/demand everyday and as important and wise as the people at the USDA are, they are just another opinion when it comes to supply/demand estimates………………..What matters most is winter wheat seeding figures, stocks and the final production figures! We could start getting published estimates of all those figures very soon!

                                Timely rains continue to give the Brazilian bean crop the potential to be very, very good this Spring………….Yet, grain traders realize that things can change quickly and we monitor the weather every day………..The US Plains are forecast to turn a little drier than normal in the recent 8 to 14 day forecasts but, we have been blessed with significant moisture prior to entering  dormancy on the winter wheat crop………..As long as temperature don’t drop to under 10 below F for an extended period without snow cover winter kill risk is limited! Warmer than normal temperatures in the Midwest might breed conditions which may damage the crop stored outside………….Regardless, elevators and warehousemen are looking to move these stocks before the end of February which could keep a lid on basis levels and corn and bean  spreads on the defensive.Wheat remains the most sensitive of the grains and inter and intra market spreads could remain volatile……………..Kansas City under Chicago, especially in the new crop July and forward contracts may be seen as an opportunity for ownership……….wet weather did impede winter wheat seeding and shorts may get more nervous staying with their position as we approach January 11………………

                                The geopolitical happenings and posturing and negotiations with the Chinese trade pact might be beyond logic and reason and projection…………….No one knows! Yet, there is hope that a solution will be found prior to the scheduled end of the truce in March…………….The Federal Reserve meets mid week and there is a growing attitude that the tightening policy may be  loosened  as the world equity markets are on the defensive and very sensitive to increased interest rates…………………It might be nice to go back to a policy of steady growth in the money supply and allow the free markets to determine the cost of capital……………………..

 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.     

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Steve Bruce

                                           
Walsh Trading
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