The National Weather Service forecast of cooler and drier than normal in the Heartland in the October 13 to 17 period is a small reason for today’s weakness…………………………………………………..We have experienced fund short covering ahead of the USDA Production and Supply/Demand Reports on Thursday and some analysts believe that the grain markets have ripe for funds to increase participation in a large way ……………………………………………Macro weakness in equities and crude oil might have set the negative tone today and there is concern that we might see erratic behavior and actions from political entities ahead of the elections in the US which are only 4 weeks away……………………………………….
Wet weather has slowed harvest and seeding activity this past week and raised concern that storage space is still very tight and basis levels and spreads might be on the defensive until the last few acres of beans and corn gets harvested…………………………Traders sense that every bin, elevator, rail car, barge and bulk carrier will be full and new adaptations will be found to store the bin buster crop of 2018/2019………………………..Spreads, in my opinion, could stay on the defensive in corn and beans………………..
Crop Progress Reports are out tomorrow afternoon. The USDA reports on Thursday, according to some trade sources, are expected to increase corn and bean production and add to carry-over in the Supply/Demand estimates……………………….The past three reports(August production/September production/September Stocks) have been bearish surprises……………………..Not playing mind games with what may be issued………………….respect the USDA and be surprised if you’re not surprised! It will not be a surprise if the USDA increases production a little bit but an increase over 200 million bushels of corn and 50 million bushels of beans will turn heads and unchanged to a reduction might spark a rally…….
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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