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Soft and Sloppy Spreads


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The most recent 6 to 10 day forecast calls for the Heartland to stay a little cooler and wetter than normal. It is time to plant corn and the old adage of losing a bushel a day yield potential for every acre that gets in after May 15 needs to be given some respect. The USDA did say that we are behind with corn plantings as only 6% of the nation's corn is in the ground compared with the 5 year average of 12%. The measurement of the delay might get more pronounced next week as field reports are still revealing too wet to work in most of the Heartland. Winter wheat ratings improved slightly but the eastern soft red states still are rated a little on the iffy side. Some sunshine and heat is what is needed. Oat seedings are at 36% compared with the average of 51%. Spring wheat is well behind at 5% compared with the average of 22%. Might see a year where some broadcast their wheat. Crusty old timers usually say that rain makes grain but we are starting to get concerned that other problems might happen given the lateness of planting.

But, we've got abundant nearby domestic and world stocks of everything and it doesn't appear that the Fed and other central banks will be easing in the near term. There's a general feeling of calm in the markets and end users appear to be letting the markets come to them. Farmers are long and funds are short and the standoff continues.

There are only 5 trading sessions left before first notice day against the May contracts. We sense no urgency to own the receipts! Spreads might stay soft and sloppy!

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
312 985 0156
888 391 7894 toll free
312 256 0109 fax
sbruce@walshtrading.com
www.walshtrading.com


Walsh Trading
53 W Jackson Suite 750
Chicago, Il 60604



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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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