Sharp Reactions May Happen! Be Prepared!

Steve Bruce General Commentary Leave a Comment

                                Regardless  of whether you believe the acreage figures it is what we have to trade. Until the August crop reports for corn and beans with production estimates  based on field surveys which the USDA has allegedly tweaked in prior years to adjust for questionable acreage estimates , this is the figure we’ll trade. The USDA will issue a fresh winter wheat production estimate on July 11 as well as international production and Supply/Demand projections.

                                It’s weather which might be 99% of the trade’s focus for the next few weeks and the recent forecast of warmer and slightly wetter than normal for the Heartland is very conducive for development for corn and beans while wheat could use a little more dry in the States and a little cooler in Europe.

                                Basis levels have firmed significantly for old crop corn and new crop wheat in recent weeks and fear and anxiety over the impact of near term weather might spark sharp moves in the next few months. There is a lot of feed wheat available and it will be interesting to see how the southeastern poultry    market incorporates a portion into the ration as well as if the cattle feeders allow some wheat into the feedlots. There is a major disconnect in the wheat market for protein as it is abnormal for the lower and softer classes to be priced so dear. Does hard wheat move into deliverable Chicago elevators? Does soft red get seeded in old hard red areas this Fall?

                                All of the above was written before the report! Sometimes it’s a good idea to put in “just in case” orders at prices which, to you, are extremely cheap and/or extremely expensive and you can afford to live with your decision.  Weird things happen but, please, be confident with your price levels and remember to cancel the orders if strange things don’t happen and large moves don’t occur with the reports.  

                                The figures released by the USDA at 11 will have an impact and anything written a millisecond after the release is too slow.  Might be smart to just wait to see what the forecast is on Sunday night! Let the High Frequency Traders do their thing the rest of today! And let the Big Boys do what they need to do at the end of the quarter.   Have a good weekend!                                          

                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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Steve Bruce

Walsh Trading
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