The weather in South America is getting a little sour and that might generate a little more interest for getting end users to accumulate some beans and wheat..Hopefully, a downturn in the potential for an increase in the world supply of oilseeds will get China and the US to find an agreement to the trade deal…………….and all the unicorns and fairies will get the US to find a way to increase border security and allow for all of the non essential government workers to get back on the job………………..This matters because we are still scheduled for some major grain reports next Friday and we are in jeopardy of rescheduling!
It might be an unfortunate fact of life but our governments have become large influences in our markets…….The Democrats take over the House tomorrow and there may be some changes in the services received from the USDA…………..It is believed that all services based on fees such as grain inspection will continue yet statisticians and economists might stay on an extended holiday………..We will survive!
Weather is still one of the major market influences in the grains and despite the recent poorer conditions in South America the World has been blessed with good conditions in major winter wheat growing areas………………….Yet, winterkill usually occurs later in Winter and early Spring as the result of extreme temperature fluctuations and a lack of moisture……………The weather show has just begun with the wheat market and given the perceived tight world stocks to use ratio there’s not a lot of room for error this Spring……….We may have to fly blind with the acreage figures if the government remains in partial shutdown mode……………Regardless, the prevailing attitude is that winter wheat acres are very low as problems with seeding occurred in key hard red states given the very wet Fall in 2018………Soft red acres are expected to be lower as well as the Mid South experienced problems, too!………………….. The recent talk emanating from Russia that it is picking up its export activity was inexplicable as in a sane world exporters don’t talk prices down……………Argentina harvest has been slowed by wet weather and this may bring about some quality concerns on the final 25% of its wheat crop…………..We still sense solid support in the wheat market as Chicago March approaches $5 but, it’s not time to get silly on the upside as end users have a couple of weeks to wait to see and pray for miracles with production……………..
Corn remains constrained by the need to move the crop in temporary storage as we approach the onset of warmer weather………….Daylight is growing………..Spreads could remain on the defensive unless a major logistical problem develops in South America……..If the USDA does not generate its stocks, final production and supply/demand reports on January 11 I’ll go out on a limb and say that it’s unlikely that we’ll be running out of corn in the 2018/2019 crop year! There’s more excitement in wheat and beans!
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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