This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Monday September 12, 2016.
WASDE will be released in a few hours and the markets are taking away some of the premium put in last week as traders put on protection plays ahead of a busy 3 weeks in the grain markets. Today we have WASDE, coinciding with the start of the harvest. Those two events will drive the news flow until another big USDA data dump at the end of September. I expect the corn and cotton markets to absorb the data pretty quickly, while beans have potential to start trading on the downside with a little more ferocity if yields come in higher than expected (I think the USDA tags them above 50). Wheat markets will continue to focus on Russian offers as they are the cheapest on the street. Without hikes in overseas wheat markets, corn is going to have a tough time getting too much steam to the upside because wheat isn’t coming along with it.
The early harvest reports I have heard for corn in Illinois have been pretty good, but everyone seems to be below where they were in 2014. It’s hard to get too excited to buy into a story like that, but with the way the trade is set up in corn it’s easy to project a spike in corn prices given any rumor or innuendo that will have yields falling. At this point in the year the only thing I can see that would cause that would be too much moisture. The forecasts are showing moisture levels higher in coming weeks, but it might be too little too late for much of the Corn Belt. I expect yields for corn to come in close to 175 per bu and a retest of recent lows to follow. I remain very bullish corn right now but would save bullets to fire on the break, because…
Brazil imported record amounts of corn in August and the weather down there is dry. Be very, very careful if you are short longer term corn premium, this market has the makings of something if the timing is right and more importantly, wheat can join the party.
Besides WASDE this week, there will be little to push price outside of weather. Livestock reports are released next week.
Going into the wasde I am bullish wheat, bullish corn (see if Sep seasonal develops before buying) bearish cotton (crop must develop though) and bearish beans (short term). If anyone has any questions on strategy, give me a jingle or email.
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