The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
The Hueber Report is a grain marketing advisory service and brokerage firm that places the highest importance on risk management and profitable farming.
Click here for a free trial
I wish there were something rousing in the news to begin this new week that would invigorate buyers to return and send the overconfident bears scattering for the exits but alas, nothing that I can find would seem to provide such. It is not that ag markets are doing much of anything negative at this point, which after the shellacking that we took last week is a step in the right direction so the speak, so I guess one needs to remain patient for now. It is interesting to note that the only market that managed money made any real changes to the negative side was corn, which is also the market that emerged from the reports with the most positive outlook. Last week they sold another 34,000 contracts of corn, bringing the net short to 104,000, while in beans remain short but added nothing and in wheat covered shorts and are now back to an even position.
Obviously, the harvest is moving at a rapid pace in Russia this year, but that may not necessarily be all for good reasons. The Ag Ministry reports that the overall grain harvest thus far has amounted to 27.2 MMT compared with 12.2 MMT a year ago, but yields have been averaging around 3.76 MT per hectare versus 4.49 MT last year. They have harvested about the same amount of barley to date this season as last, but here as well, yields appear have been lower coming in around 3.39 MT per hectare compared with 4.25 MT last year.
It would seem there is another leading commodity market that could be on the verge of heading into price trouble; Crude oil. As any of us who uses fuel knows full well, this market has been trending higher since early 2016, and has retraced right at 50% of the entire breakdown from the 2012 peak (128.40 Brent) to the January 2016 bottom (27.10) stimulated by both an improving global economic situation and the fact the Saudis (OPEC) and Russia agreed to limit output. It appears these parties have now decided that prices have recovered sufficiently to open the spigots a bit more, at least enough to discourage all those upstart frackers here in North America. While we have yet to collapse, we do sit on the cusp of violating the uptrend that has supported this market since the last corrective low in June of
2017 and appear to be poised for a real correction. While the whole corn as an energy markets appear to be a thing of the past, considering the major influence that energies have on most commodity indexes, a downturn in crude would probably not encourage much investment money to flow in our direction in the immediate future.
No comments have been posted to this Blog Post