Unicorns and rainbows and increased Canadian wheat acreage………Might happen if Mother Nature allows it to happen and the 6 to 10 day outlook remains cool and wet so the acreage increase may not happen next week. Yet, all is well in the world as rain makes grain and the attitude is that we’ll get the crop in the ground later than sooner but, it’ll get planted. Producers are frozen as we are below the cost of production in many areas…….Those that have succumbed to the urge to bottom pick are paying the price. Texas hedging is always a risky venture. Might be best to just go out and sell deferred production at break even or better prices and allow old crop to find its value area.
Kansas City is nearing a $3 handle and wheat is the cheapest it’s been in years. We are at the low end of the decade’s trading range yet, the increase in all grain prices in the mid 2000’s to present might be attributed to the era of helicopter money initiated by central banks. That era may be over, or not as the central planners usually return to fiscal insanity when facing hardship. Canada and Europe have the ingredients for a better than average crop and until this changes the fund shorts are in charge. New crop winter wheat harvest is rapidly approaching and the basis has room to drop. Funds may be counting on taking profits when the farmer gives up physical ownership; basis will slip when end users see tighter storage.
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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