All the friendly microeconomics in the grain world might not overcome the bearish macroeconomic forces especially as we come to grips with over expanding money supply this past decade instituted via the policy of quantitative easing and not just in the United States………………………….The credit card bill is due and the Chinese might not be able to finance more deficit spending by the USA with their economy recently slipping. It’s getting tougher to keep the charade going…………………………………………………..All the soothsayers warning of pain and suffering as the world pretended that alchemy is real might be right! Plunge protection team to the rescue!!……………………………………………..Until it doesn’t work anymore………and I don’t know when that will be yet we will all know when it’s here…………………………………………………………………
Input costs have risen this past decade yet, yields have dramatically risen which has kept the producer from getting too bloodied the past two years……………………………………………………Carryover projections might be considered to be comfortable for corn, tight for wheat and excessive for soybeans and when all boats rise and fall with the tide we’ll continue to look at inter market spreading and as we approach the time when winter wheat planting ends in a few weeks then wheat might be able to rally……………..The potential for a lot more acres could have been an anchor on the wheat market the past two months as the producer has been incentivized to plant more this Fall……………………………..Now we can see how it grows and stands into dormancy and wait for winter wheat seeding figures released in January 2019………………………………………..The old bean/corn ratio this last decade has typically stood at 2.5 and is presently near 2.3 in the 2019 crop year………………………………suggests plant corn and not beans yet, we may see more winter wheat planted this Fall which might generate more double crop beans next Summer………………………………Regardless, it still looks like the market is screaming for more wheat acres and then corn and lastly beans………………………………………………………..
First notice day against the November bean contract is next Wednesday and it appears that there is no reason to own nearby beans……………………………………………………..Traditionally, this might lend some pressure to flat price……………………………………………And, then the crusty old timers say to buy heavy deliveries……………………………..wait and see……………………………………………..
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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