The CME is expected to lower the storage rate for wheat as of December 19,
2018 as the WZ/WH spread is at less than 50% of the CME calculated full carry running average on November 23………………………It is close to a mathematical impossibility to not lighten the maximum storage rate starting on December 19 as the running average with two days left to calculate is 44.22% and the last daily calculation was 20.5%……………… The Kansas City calculation is anticipated to remain unchanged given the present spread difference of KWZ/KWH………………………Please remember that the CME has changed the corn and bean contracts starting with CZ 2019 and SX 2019 and allowing for higher daily storage rates……………………………………The lowered storage rate for Chicago/Toledo/River Delivery soft red wheat might serve as an incentive to clean out the bins, a herculean task, and make room for items which offer more return such as corn or beans…………………..The “Voice from the Tomb” states to buy March wheat on November 28……………………………….
Grains are still influenced by politicians as trade pacts and deals or the lack thereof have been cited as reasons behind the slippage in price since August………………….Hopefully, an agreement may be reached at the G-20 meeting in Buenos Aires at the end of the month………………….Southern hemisphere weather is at center stage as bean sowing is in full swing as is wheat harvesting………….At this time, there appears to be no major headaches in Argentina, Australia or Brazil.
Are we in holiday mode? First notice day against the December futures on November 30 and Hanukkah starts December 3 and then there will be only 20 trading days left until we close the books on 2018……………….
Happy Thanksgiving!……………………………………..Grains close early on Friday!
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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