For your consideration!
Wheat likes dry feet!
And we’re not receiving what the plant needs as we are harvesting or experiencing harvest delays and that’s hot and dry weather conditions. Hard red wheat is priced to compete with corn in the interior. Look at the discount schedules and bad wheat tends to be forced into the feed channels. Millers and exporters are not in a panic mode, yet! Keep an eye on basis levels as quality concerns might show up there first! If the quality situation becomes dire enough then we might see a scramble to own deliverable receipts. Even the vomitoxin tainted Eastern soft red might have more value if harvest quality dips…………..Millers might be scrambling to get some of the decent new crop coming off in the Southeast and blend it with the tainted bushels. What we need for good quality is warm and dry over the next 6 weeks. Too much moisture breeds disease and problems. It is going to be a very interesting June and first half July. The potential exists for crazy things to happen when we get to the point when “feed the mill” is the command. Like a good scout; Be Prepared!
The USDA will give us a new corn acreage figure on June 28 for conditions as of June 1 and then, according to discussions with the USDA, we will not get another revision until the final report in January 2020! How many acres are lost? Start out with 92.8 million acres and do the math. Of course, the weather over the next two weeks is critical specifically in Ohio, Indiana and Illinois.
We are not running out of old crop corn or beans and spreads could remain very soft for the current crop year. Speculators are looking at CN 2020/CZ2020 as a trade to benefit from more headaches with newly planted crop. It’s already at a 40 cent inverse and with storage moving to 8 cents per month there’s only about 80 cents of risk. Yet, inverted spreads can keep on inverting!
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.
Join
My Mailing List
Steve Bruce
Walsh Trading
312 985 0156
888 391 7894 toll free
312 256 0109 fax
sbruce@walshtrading.com
www.walshtrading.com
Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the
Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for
all investors. Therefore, individuals should carefully consider their financial
condition in deciding whether to trade. Option traders should be aware that the
exercise of a long option will result in a futures position. The valuation of
futures and options may fluctuate, and as a result, clients may lose more than
their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF
FUTURE RESULTS.
All information, communications, publications, and reports, including this
specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be
construed as a solicitation for entering into a derivatives transaction. WTI
does not distribute research reports, employ research analysts, or maintain a
research department as defined in CFTC Regulation 1.71.