Grains prices are tied to the political talk and posturing with China and the likelihood of a new trade agreement……………………………………………………………………It’s been brutal as many ugly accusations and allegations have surfaced as it appears that the time of pretending that things haven’t happened is over! Hopefully, things will turn to sea shells and balloons and unicorns and puppies soon and agreements will be reached! It is necessary to keep our eyes and ears open 24/7 and ready to pounce on all opportunities…………………And it’s not just China on the political front…………….all of the happenings with Brexit , Russian/Ukraine, Turkey and OPEC might and could have a major impact on prices………………….
It’ll be refreshing if and/or when weather becomes the key factor in the grains………….Right now things look very good in South American for beans and feed grains…………….Australia is harvesting its smallest wheat crop in ten years yet, they are harvesting! Our winter wheat crop has been blessed with ample top soil and sub soil moisture yet, we’re always watching the temperatures and snow cover specifically in the Plains as the crop is susceptible to winter kill if we get down to sub 10 below with no snow cover………………..Typically, more damage is done in early Spring with heaving, with too many thaws and freezes!
We’ve seen some corn and wheat deliveries as the trade prepares for the closing of the Great Lakes and headaches and hindrances of transportation in the winter months……………..There are still many bushels of corn and beans in temporary storage situations which might move on any basis pops……………..This may keep corn and bean spreads on the defensive………………….Wheat spreads may remain very volatile as the world market is still tight and the domestic market, specifically for soft red, has seen historically strong basis levels yet, the vomitoxin variable with the Chicago wheat contract leaves the advantage on spreads to the nearby short, the deliverable elevator!
The USDA crop report is on Tuesday and the trade has been talking about only minor tweaks to the Supply/Demand estimates………..Yet, respect must be given as surprises have occurred………………….even and open minded as possible into all reports!
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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