September Surprises

Steve Bruce General Commentary, Grains Leave a Comment

What might impact the market from this point onward to the USDA reports set to be released on October 11?

    The USDA figures shook  the markets today as the trade talk prior to the release was that corn yields would be slightly down, bean slightly higher and world wheat carryover a little tighter…………………It’s always something!………………………………………..In past years we’ve seen surprises in the October reports as harvest reality might cause the USDA to tweaks the corn and bean crop figures………………….. So, respect the USDA and  don’t be surprised if there’s a surprise on October 11……………..Going into the report we were hearing from some producers that bean and corn results were nothing short of spectacular …………………Yet, mother nature will be a major influence to  get it from field to bin………………Crusty old timers have stated that big crops get bigger and we wouldn’t be surprised if the numbers grow in the October, November and final figures released next January!

We are keeping an eye on  basis levels  because if the reported yields continue to be a good as has  been reported  we will be seeing a “race for space”. Traditionally, beans get binned first and  then  corn storage gets creative……………………….Regardless, warehousemen and elevators might want to get paid for their space and/or the risk of placing the crop on the ground …………………………

The September production numbers and carryover  estimates might lend a sense of relief to end users………..Some might consider that prices for all grains and beans are cheap as we are near the last decade’s lows and might be willing to consider covering extended needs………………..Others might just pull the plug and go away for a month and see how the market performs through harvest …………………..It appears that there is no reason to chase a rally……………………

Weather remains critical as we’ve seen Florence capturing our interest this week. The Midwest is expected to enjoy great harvest conditions in the near term and the hard red wheat regions are expected to benefit from rains………Australia remains dry, as does the Black Sea wheat areas and we are in the gut slot of winter wheat seeding in the northern hemisphere and the optimum condition is a few days of dryness to sow and then a few days of moisture to get it going…………..

News sources are citing concern over the mid- term elections in the United States as a possible reason for caution and pause with market participation…………….Yes, political decisions and posturing over tariffs and pacts and deals have had a market impact and, in my opinion, almost impossible to predict……………..the crusty old timers usually say “follow the money” yet , futures traders understand that it is a zero sum game…………………..”follow the power”?

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Steve Bruce


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