Is there a reason to start to panic over supply of beans? corn? or wheat? The answer to corn and beans could be no despite the recent episode of hot and dry weather and slipping yield potential in Brazil..................Wheat might be a little different as the US might be the cheapest and most reliable supplier of decent quality for a few months.......................Panic might not be the correct term and concern might be better.....Hopefully, the northern hemisphere escapes extreme weather conditions this late Winter, Spring and Summer and we'll enjoy good wheat quality but we are sensitive to conditions not being optimal! Wheat/corn near $1.50 is expensive, not as expensive at the $2.10 last July when the market was screaming for additional acres, and we might need some fear to be generated via much lower seeding reports and/or inclement weather to reach to $2.00 level again...............Timing is critical as wheat breaks dormancy in late February and early March.............Wheat could remain the "sensitive" market until we get into harvest in Texas and the Deep South in mid May as end users might be oversensitive to the weather and the impact on quality..................
There will be a day when the trade will not have to be concerned with the social unrest in France, partial government shutdown/shakedown in the US, delay of Brexit, military tension in Syria and all other factors increasing the anxiety and tension in the world financial and political mindset...........But, not this weekend..............................We live in interesting times and the potential is great that the grain markets become a little more volatile in the near term............................
Private enterprises and South American concerns have been lowering Brazilian beans and corn production estimates recently(there are sources other than the USDA) yet the World is still contending with comfortable corn and bean supply/demand projections. We are still uncertain as to when the USDA issues its reports.......We continue focusing on basis levels and freight rates for indications of interest and/or concern!
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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