On November 23 the CME has the authority to recalculate daily storage fees for wheat and if the WZ/WH spread is at or under 19 cents storage rates will drop to .00265 cents/bushel/day from the present .00365 cents/bushel/day…………….Spreads might just stay within the range of less that 50% of full carry and, theoretically, may go to inverse, but, that’s very doubtful as stocks are ample and should spend the winter in Toledo as the Great Lakes close in mid December………………..Storage rates will never go below .00165 cents/bushel/day while the sky is the limit if we start widening out again. There are only 9 trading days left until first notice day against the December futures………………….
Traders are still very concerned with the macroeconomic impact from central banks and politicians as a world economic slowdown might put a wet blanket over any rally potential which might come about from Southern Hemisphere weather concerns and/or trade pact agreements being reached with China and/or others……………………………….But, prices are not attractive enough to induce farmer selling in both new and old crop…………………………Feeders and Millers appear to be energized to accumulate corn sub 360 nearby futures and wheat sub 480 nearby futures…………………………It’s a stalemate and traders are looking to the weather and politicians for direction and both are tough to predict……………………………………………………..
As we approach first notice day against the December futures basis levels suggest that corn spreads might stay on the defensive while wheat spreads can stay squirrelly…………………………We are closed next Thursday for Thanksgiving and will close early on November 23 according to the CME web site!
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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