It appears that the grain markets are stuck as farmers are long, funds are short, end users are comfortably covered and there’s a lot of uncertainty in central bank and European Union policies in the short run which may be keeping small speculators on the sidelines. The weather is not cooperating with plantings yet, there’s ample time to get the job done given a window of opportunity in the next few weeks.
The USDA releases its Prospective Plantings estimate next Friday as well as the Stocks-in-all-Positions Report as of March 1. These figures are important and should be respected but, the weather is getting more airplay as the moist and soggy conditions in the western corn belt might cause some planting delays.
The world and domestic markets appear to be comfortable as corn and bean spreads are soft. This may not change until new crop. Wheat spreads are still nervous and quality is still a concern. Quality is needed more than quantity this harvest and it just needs to be played out!
Producers/Farmers may not have hedged much new crop production as we are below breakeven in most areas assuming normal yields. End users are not that concerned over the weather, yet! We might get a little more volatile in April if the weather doesn’t get a little more cooperative. The potential exists for sharp rallies if and when the fund shorts want to exit. Given normal weather the funds may have enough of an edge to wait it out until harvest and exit when the producer/farmer gives up physical ownership. But, there’s a lot that can happen in the interim and that’s what keeps us looking at the weather forecasts 24/7.
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.