Please join me for a free grain webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts. Sign Up Now

Commentary

Corn, soybeans, and wheat all traded higher today as both short covering and fresh buying provided support. More analysts are dropping their US yield forecasts as the harvest gets underway and yield data becomes available. While some yields are quite good and a few record sized, we are also hearing more reports of substantial yield loss in corn from disease pressure. From the field reports indicate corn fields not treated with fungicide are seeing yields as much as 50 bushels per acre less than a year ago per Pro Farmer. Even some of the most bearish outlooks have been lowered. That said big crops are coming amid storage concerns. Yet, beans are 40 cents higher on year, while corn has almost filled the gap from the July 4th weekend gap open lower. I believe grains rallied on two fronts today. First, our biggest exportable feed grain buyer China, has announced that Premier Chi and President Trump will be speaking Friday to confirm the closing of a Tik Tok deal which has been long rumored. This may have encouraged managed money shorts to cover positions on the assumption that the talks could also provide details on future grain purchases. It is assumed among the trade that China or their alias “unknown destinations” hasn’t purchased any soybeans for future shipment for the 25/26 crop marketing year. Keep in mind that the unknown category made some flash sale announcements last week on beans while on the sales for future shipment report, the “unknown category” has purchased 2.5 million metric tons for future delivery over the last five weeks. I wonder who is this masked buyer if not China buying all these beans? Second reason today the Dollar got slammed on the eve of the next Fed meeting. It is widely accepted that the Fed will cut 25 basis points, but it may do as much as 50 at this meeting, with all the re positioning at the Fed recently. Announcement at 1pm tomorrow Central time. In summation short covering was the feature in the grains on these two fronts. Potential trade deals with China followed by India and Taiwan have created some optimism. However monetary policy long term that leans severely dovish in my view into 2026 maybe the call for the funds to jettison their short grain positions post-harvest, and perhaps own food and energy into next year. 

Trade Ideas

Futures-N/A

Options-N/A

Risk/Reward

Futures-N/A

Options-N/A

If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now

Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

[email protected]

www.walshtrading.com

Walsh Trading

311 S Wacker Drive Suite 540

Chicago, Il 60606

Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was 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 market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.