New Crop Year for Wheat

Steve BruceGeneral Commentary

                                Typically, hot and dry makes the grain markets rally in June and July but this year cool and wet could keep, us from breaking. Weather needs to be perfect from now until harvest to assure decent yields in corn and beans. Wheat harvesting is in full swing over the next 6 weeks in hard and soft red areas and it is important that we see windows of hot and dry in order to attain some decent quality. Bad wheat moves into the feed channels and the vomitoxin stocks in Ohio might start having some value as chicken feed in August and September in the Southeast and it will be interesting to see how the July/September spread  moves if we stay wet for extended periods over the next six weeks.

                                The USDA gives us its winter wheat production estimate as of June 1 on June 11 and then we’ll get Grain Stocks and Plantings on June 28 based on conditions as of June 1. So, there will be debate as per its accuracy as we’ll still be planting a lot of corn in early June. It might be a Summer of arguments over acreage!

                                Washington and weather rule our world.  The “Orange Man Bad” contingent are saying all the bad things happening to the agricultural sector are a direct result of actions taken by our President while others are saying that it’s about time someone had the conviction to do the hard, yet right things.  Mongo just pawn in game of life! Of course, actions taken in Washington, Brussels, Beijing, Frankfort, London,  Moscow and other political centers matter but we’ll be looking at the weather forecasts on Sunday night and Monday morning.

                                In June we’ll be dealing with the liquidation of the July contracts ahead of first notice day on June 28. We still sense that corn and beans might remain soft and weak with the spreads while wheat will be looking at quality during harvest and the basis will be the key indicator of that! Wheat spreads will follow!

                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

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