Good morning friends!
Corn 346’0 (unch)
Soybeans 966’4 (-6’4)
Chi Wheat 394’0 (-1’4)
KC Wheat 404’2 (-2’0)
Cotton 6877 (+.25)
Crop progress numbers from yesterday were solid, coming in just under averages for corn and above average for cotton and soybeans. Conditions were left unchanged in corn and raised a percentage point in soybeans and cotton. Hurricane Matthew is bearing down on the SE coast of the US, which could cause some production issues if NC production is touched. I’m hearing it’s a long shot but it’s in the cards at this point. The Texas crop is 17% harvested with conditions improving there. I think we get a higher production number in the WASDE and encourage folks to stay short at these levels, looking to short new crop production on another push into the low 70’s.
Winter wheat planting is 44% complete, I am surprised we have not heard more about US acreage. The longer term forecasts I follow in wheat are showing excessive dryness to be expected over the western growing regions. I have been saying this for what feels like months, but the wheat market is record short and probably got shorter yesterday. I remain bullish wheat over the long run. I encourage traders to look at aggressive strategies like a collar in new crop wheat to take advantage of the record low volatility and the relation of the price of wheat to the cost of production. My crystal ball is cloudy when looking at what will make prices move, but based off the chart below a move is coming.
No reports on the schedule for today from the USDA. Be on the lookout for private analyst predictions, I think we will see some yield hikes in coming weeks as satellite data is really strong and USDA conditions are improving. I remain bullish corn and wheat and bearish cotton, I would be selling soybeans on any push toward 9.90 if you need to move them off the combine.
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