It might appear that we are approaching a holiday atmosphere in the grain and bean markets…………………………We are wrapping up harvest in the northern hemisphere and starting to escalate harvest in the southern hemisphere with wheat and planting and pollination with corn and beans…………………………………..Mother Nature appears to be becoming more helpful with the final 20% of corn and bean harvesting in the USA while winter wheat seeding has been stymied by wetter than normal conditions which is beneficial to planted acreage yet, we needed an increase in winter wheat this year and it doesn’t appear that we achieved it……………………………..The USDA is scheduled to release winter wheat seeding in early January with the final production numbers, stocks and supply/demand projections…………………………………………………………..
Rollover of December contracts may be the focus of the trade for two more weeks………………Cash basis levels suggest that delivery is the best sale for corn while wheat is on the bubble………………….This suggests that corn spreads might remain on the defensive while wheat spreads may react a little bit more positive…………………………………..
Producers are already preparing for 2019 plantings and , as usual, we have to look at the ratios which might influence the rotation………………..Yet, CT/SS, December 2019 corn/November 2019 beans at 2.3 is a very benign ratio…………………………………..Corn/Wheat at $1.40 to $1.60 is historically high in respect to wheat yet, what’s done is done as there’s no time to seed wheat anymore…………….the question will be in the Spring if it pays to plow it under and plant something else………………..Please remember that the December 2019 corn contract and November 2019 bean contract have changed as storage rates are higher……………………………….impacting the potential for wider spreads……………………………………
The macroeconomic influences in the grains such as central bank policies and political trade deals and pacts are still in a precarious state which might be an influence with the recent sideways and drifting pattern which the markets have experienced……………………Hurry up and wait!
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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