Is a Chinese Trade Deal signing bullish or already in the market? Some say that everything comes out in the wash and if they couldn’t or wouldn’t purchase US origin grains and oilseed other exporters would happily fill the void. There’s always a finite number of bushels in the world and traders know logistics and pipeline inventory and know how to profit from disruptions in the regular flow.
It’s a weather game for the next few months. Too wet. Too cool. Do we average out and have a hot and dry Summer? This is what makes grains so volatile. We don’t know yet assuming normal weather from this point there ingredients are present for a very good corn crop while wheat might not have the bushels given the acreage decrease but what we really need is a good to better than good quality crop this harvest. There’s lots of less than milling quality wheat in or near deliverable channels and its value may be found in its ability to ensure carrying charges! We might need a total disaster with the harvest to clean out the bins and then revisit and revise contract specifications. Beans are the last crop to get planted and lots can develop over the next two months. Spreads still suggest that there’s enough old crop cushion to absorb and minor headaches with weather. It’s a weather waiting and watching game right now.
Spread activity has been brisk as we’ve entered planting season. Corn/beans and corn/wheat are finally at lukewarm levels and ratios…………….meaning the market is not favoring more acres in anything. Corn and bean spreads remain soft and on the defensive and we might need a very major catastrophe with new crop production to spark a gain title to old crop inventory. Wheat is still showing that we need quality this harvest.
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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