One of these days the market may decide to move and the reason for the move might be because of some weather problem such as too much rain for plantings, too much rain for wheat harvest, too hot and dry for crop development. Or, the market just might continue to tread water as the macroeconomic influences such as a Chinese trade deal(hopefully soon), Brexit implementation(they might forget what they voted for), interest rate/central bank /political decisions(power corrupts) remain too tough to call. Basis levels and cash markets continue to suggest that the world is awash with corn and beans while wheat might have an issue or two with quality and quantity. We are at a critical time in wheat development in the US and we might anticipate a little more volatility with weather forecasts. Assuming normal weather conditions from here until harvest we might see a very solid hard red wheat crop yet, soft red and hard red spring might be a little disappointing.
We remain believers that corn and bean spreads could continue to slowly widen while wheat spreads might show signs of bull life if weather scares develop. We are approaching first notice day against the May contracts as there are only 11 trading sessions left until first notice day. Traditionally, most end users in wheat scurry away from the May as soon as possible and we might start seeing that next week. Those playing in the May past next week typically are deliverable elevators, millers and cowboys and cowgirls who like riding broncos. We are still watching the WN/WU and WZ/WU butterfly as old crop basis strength combined with weather jitters could keep WN firm while the reality of harvest in northern Illinois, Indiana, Ohio, and Michigan in mid to late July typically puts pressure on the September.
We are off next Friday as it’s Good Friday! We usually plant 80% of the nation’s corn crop in the April20-May 10 time frame and after May 10 the crusty old timers say that we lose a bushel a day from national yield potential. It’s good to have a carry-over cushion to alleviate planting anxiety yet if we are as wet as we’ve been in March and April through mid May then anxiety will turn into concern and then into a problem. Given the extent of fund short involvement and the reluctance by producers to sell at a loss we might start seeing some sharp rallies after Easter.
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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