Information courtesy of Archer Financial Services. Contact Scott at 800-933-3996 or firstname.lastname@example.org
"Back to work!" was the refrain this week in Washington, as a last minute deal was struck to re-open the US Government and raise the debt ceiling. This had the doors at the USDA opened and information starved traders looking forward to regular market data.
It was largely a quiet week in corn and soybeans as the lows were forged on Monday and a steady to higher trade took place into Friday. The most significant casualty from the government shutdown in the grain markets was the official cancellation of the October USDA Report. It is believed that this is the first time that a monthly USDA Report has been skipped in 147 years.
As of the last Commitment of Traders Report the non-commercial funds has a record short position in corn. The next USDA Report is widely expected to show an increase in corn production, perhaps significantly. The delay until Nov. 8 of this information, had some impatient corn shorts exiting and allowing a steady rise to corn prices as the week progressed. Both corn and soybeans are expected to get a boost from export business that took place in the darkness of the U.S. government shutdown.
When this business will actually be announced is something that the markets are watching closely. The wheat market caught a strong bid on Friday as supplies of Argentine wheat are on the decline as well as potential fresh Chinese demand that sent wheat prices surging to their highest levels in over three months.
The strong wheat markets and anticipated demand announcements should keep prices supported into the middle of next week, before the attention will once again turn toward higher production ideas as we move to the last week in October.
Producers should look to secure cheap options for added or complementary hedge protection. The purchase of these options can allow you to exit more profitable futures or options hedges on a break to new lows in the coming months.
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