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Lethargy


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The only constant is the tightening of the Chicago wheat spreads.  Fear of receiving vomitoxin laden deliverable stocks, at a discount might,  be a reason for stopping the trend and allow the basis to perform the task of rationing milling quality. Things will stay interesting in wheat through March deliveries as the running moving average in both Chicago and Kansas City are at levels which requires that storage rates decrease next month..we'll have to widen the spreads a lot, and quickly,  to   leave rates unchanged.  Given the light acreage seeded to winter wheat this Fall any problems with weather and coming out of dormancy could spark a rally and/or high anxiety.

 

 

                                Even though the trade has been talking about the detrimental impact of the hot and dry weather in December and January to Brazilian bean yields there still appears to be enough in the world to stem any concern of nearby tightness. US producers appear to be willing to move stocks off farm and basis levels are having a tough time showing strength. Spreads in both corn and beans are stagnating and it appears that we could remain on the defensive through deliveries.

 

 

                                Flat price in all grains have been stuck in a rut the past three months. Trade talk is that we need to see a rally in new crop corn values to entice more acres this Spring.       

 

                                                                                                                                                                                               

                                  

 

                                                                   

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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Steve Bruce

               
Walsh Trading
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Steve Bruce comes from the cash grain side of the market working for General Mills at the ChicagoBoard of Trade in the summers in the 1970's calling the country to buy wheat at cheap basis levels and with Illinois Grain learning the barge trade. He then spent the 80's , 90's and 00's servicing commercial clients with Geldermann and Man Financial from the trading floor of the Chicago Board of Trade shared market perception via print and electronic media. Steve takes a fundamental approach to market analysis. He completed his undergrad at Marquette and MBA at De Paul. Steve believes in the free market, Chicago School of monetary policy, and less government involvement and intervention in the grain markets. He is risk adverse but emphasizes spread trades for optimal hedging profitability. Steve can be contacted at 312 985 0156 or 888 391 7894 or email him at sbruce@walshtrading.com.
 
 
Contributing author since 06/14/2018 

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