If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in our[
When grain values are depressed leaving the bulls at their rope’s end, and the calendar turns to September, you should be alert for a major change in market sentiment. This is generally because a large crop has already been discounted and psychology begins to shift from production to demand. This may be the case in corn now, as global production appears to be peaking while demand continues to rise. Hurricane Irma is forecast to land on the Florida coast by the weekend, and has the potential of disrupting harvest in the Southeast and, possibly, the southern Corn Belt. Meanwhile, cooler temperatures are forecast in much of the Midwest through mid-month that will slow maturity. Currently, 12 percent of the crop is mature compared to the average of 18 percent. Looking at the funds, they increased their short position 135 MB last week to 545 MB. While not an overly large position, the factors mentioned may force them to cover.
Soybeans have been on the upswing since mid-August as shipments to China have improved dramatically from a month ago. Last week, they took 14.0 MB, or 59 percent of shipments. A few weeks ago, we were barely shipping them 5.0 MB. Other supportive factors are cooler temperatures in the forecast that will slow maturity, and the potential impact Hurricane Irma will have in the Southeast and, possibly, southern Midwest depending upon where she makes landfall in Florida. Currently, Irma is forecast to be the strongest hurricane ever recorded in the Atlantic. Right now, the funds are short 330 MB, which is not an overly large position. However, cooler temperatures, and Irma barreling down may cause them to cover.
There is not a lot of fresh news in wheat other than it is oversold and has been rising the past few sessions. The funds are short 500 MB and may be starting to feel uncomfortable with their position, especially with corn and soybeans rising. In a few weeks, producers will use a finely sharpened pencil to determine whether there is a potential profit in planting a wheat crop this fall. In 2009-10, when prices were similar to this year, wheat acres fell 7.1 million. Unless there is a stark improvement in values, it could happen again.
Want the kind of intel that helps serious producers succeed? Sign up for a FREE! trial subscription to our daily newsletters. ]
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned.