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Middle Tennessee | Out of respect for the board, I feel I should make some market-relevant comments within this thread, so I'll try. I don't see anyone at the moment with any market-moving power who has an interest in moving corn prices up immediately. September expiration is in a couple days, all 2017 options are now cashed-in or paid-up, and all the September 1 DP contracts have moved against producers. Some of that amounts to commercial short exposure, and CFTC reports confirm that, so at least some commercial short covering might emerge this week, but maybe late week, since the DP contracts are Sept 1, but maybe I don't fully grasp how those contracts work. None of that is to say I believe yields of 165 or 170 bu/a. The market's mission since the August WASDE, maybe even the July WASDE, has been to force acceptance of those numbers, maybe the Farm Journal's tour represented that acceptance and the news to be bought. As of last week week, commercial entities are adding longs. Unfortunately, there is the possibility that will be a drawn-out scale up, but at least it's something new. Maybe we get an exhaustion gap Sunday night and the corn ship can finally begin turning.
Beans have some whale power behind them. Within a week and a half or so, Chinese importers transitioned from reselling massive cargoes to ordering new ones. The interest in the purchases may have as much to do with protecting the value of record meal stocks as filling demand for new supply. Even with the Brazilian currency looking firm, I do not trust the meal. Far too much product available out of South America, whose farmers seem to have deep pockets second only to the Chinese crushers. Even with all the palace intrigue over veg oil, there is a lot of production potential over the next 6 months, and the Chinese buyers could turn on the commodity as quickly as they turned on corn. BTW, it was never really bullish when China suspended DDG imports, and effectively corn too.
Wheat, well, stocks are high, prices are low, and as a rule, volatility is high. The Russians evidently have some surplus to work into the market, but large players in that market aren't fools, and are unlikely to let wheat trade 10-cent ranges the way corn likes to. Funds could double their current short position if history is a guide, but at these prices, with new crop insurance price being set and planting around the corner, the only good reason to do that would be to create volatility. If support levels held last year, they ought to this year too, and we're about already there. For producers I guess that means more a little more knuckle biting, but traders should probably get a buy order in! | |
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Hey LongKC
