Planting delays may start getting serious two weeks from now. We may start seeing a little bit more option and spread activity. Maybe we’ll start to see some more buying interest in the July 2020 and September 2020 corn contracts with selling a little more nearby and long away? Might as well start talking about the rise in volcanic activity in the northern hemisphere, too! Fear mongering and “what ifs” go a long way this time of year.
Are there any reasons for end users to step up and take extended coverage right now? Other than being at decade low prices and weather anxiety we cannot see any other reasons to entice buying interest. Spreads are still suggesting that the government was spot on increasing stocks last Friday. Traders are sensing that the USDA might increase carryover this year which cushions any acreage loss which might occur because of the inclement weather. The USDA issues it’s April 1 Supply/Demand projections on Tuesday at 11 Chicago time.
Beans might stay jumpy over the Chinese trade deal yet, any weather delays with corn or disappointment with winter wheat stands might mean more bean acres. And, there’s no rush to own spreads as basis levels suggest that the USDA might increase carryover in beans, as well, on Tuesday. So, there’s no spark to own May nor November…………suggests a slow rot on the spreads.
Wheat spreads remain the lone bull in grains. Yet, Chicago well above Kansas City is an abnormality which has lasted a very long time. Unless you are a deliverable elevator it is difficult to execute moving hard red to soft red deliverable houses. Chicago at 36 cents over Kansas City is unheard of yet speculators have been run over fading it. It appears to be an insider’s game and a lot depends on early harvest results and that starts in mid May.
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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