Fall Rushes In
Sep 15, 2017
Market Watch with Alan Brugler
Fall Rushes In
Friday will be the first day of Autumn, aka Fall to most of us in the Midwest. I was looking for a few appropriate quotes about the season, other than the usual Murphy’s Law variants about equipment breakdowns! The first is attributed to Rudolpho Anaya, who BrainyQuote features saying“There is a time in the last few days of summer when the ripeness of autumn fills the air”. That’s the smell of combines running in corn that is still a little on the damp side, which I noticed in Rock Port, Missouri this week. Also pertinent to our ag commodities market is this quote from B.C. Forbes, father of Malcolm Forbes and grandfather of Steve Forbes (Forbes Magazine). He said, “It is only the farmer who faithfully plants seeds in the spring who reaps a harvest in the Autumn”. For the next 6 to 8 weeks the size of the harvest in the US will be astounding, a reward to all those who planted last spring, but a burden in terms of getting paid enough for it to afford repeating the cycle next spring.
Corn futures lost 2 cents per bushel this week after closing 4 ¼ cents higher the previous week. Corn conditions ratings saw the Brugler500 index UNCH for the week to 357. The folks at NASS raised their estimated US average yield to 169.9 bpa from 169.5 in August. The trade on average had been expecting a drop toward 168 bpa. Given the level of surprise, a loss of only 2 cents for the week is a moral victory for the bulls. USDA did hike old crop export sales. Strong weekly export sales for the first full week of the new marketing year were also a plus, at 1.047 MMT. The CFTC Commitment of Traders report on Friday showed spec funds adding another 9,689 contracts to their net short position in the week ending September 12. That put them net short 119,412 contracts and the most bearish since June.
Wheat futures continue to see shifts in the inter-market spreads. Trapped longs are still trying to exit the thin MPLS spring wheat market, which was down 3.9%. Unwinding spreads means buying the other two markets. KC HRW was up for the third second week in a row, by 1.02%. Chicago SRW lagged last week, and gained 2.57% this week. New crop export sales for the week ending September 7 were no exciting at 316,700 MT. USDA made no changes to the US balance sheet on the 12th, other than reducing the average cash price estimate by 20 cents…