Good morning friends
Feed grain markets continue to fall, December corn trades at a contract low just above 365 as spec longs continue to bail out ahead of FND starting on tomorrow’s close. I think corn, bean and wheat markets perform better next week once we hit the reset button on speculative length. September corn futures have performed well against the deferred contracts, telling me the strong basis will have folks wanting corn as it becomes available. Soybeans hover above 860 for Nov futures while front month Sep enters delivery close to 14 cents below November at 848. KC wheat is facing a similar type of pressure, which has brought the Dec contract back to 400. This has been typical price action going back a multiple years since the markets changed back in 2013-2014. Front month futures dive into delivery, pulling the second contract to 400. It hasn’t happened this year in Chicago wheat because of the difficult growing season, but we have seen weakness. Cotton markets simply have no life right now. The cotton markets are like a sponge, completely saturated with short sellers. Even the threat of conditions and now hurricane season can’t get the market in gear.
All in all, it’s a depressing time of the year for the bulls. That said, corn and Chicago wheat prices are significantly higher than where they were a year ago so it could be worse. I hate to add to bearish tone, but the Farm Futures survey released yesterday showing 94 million acres of corn planted next year has me very concerned. I did a quick video to express my thoughts, I don’t have a lot of time this morning to write on it. (Pork Bellies collapsed yesterday, if you follow the Swine Times expect a sell rec soon)
The theme for weather remains the same as it has in the last few weeks. Cool and chances for rain is the theme. If you are rooting for crop destruction its probably a week or two too early. It is a race to the finish in terms of US corn/soybean maturity with US crops nearly 2 weeks behind in development. The trade is reluctant to price any frost/freeze risk at this point. Texas producers are getting a dose of moderation right now, but things will heat up again. Weather supports a rapid pace in Central Texas, where I am hearing yields are massive. Some guys are growing so much they have no place to move it. A hurricane is bearing down on Florida, cotton acreage in SE Georgia does not appear to be under threat. This is the time of the year for it though, the last two years we have seen massive storms hit both Texas and Georgia.
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