Headlines:

  • Harvey May Cause Long-Term Disruption on Houston’s Rail Tracks
    Major U.S. railroads have warned it could be a long time before normal operations resume in the Houston area where Tropical Storm Harvey caused catastrophic flooding that overwhelmed roads, bridges and train tracks. The closure of rail lines in the grain transport hub and nexus for cross-border traffic with Mexico presents a costly headache for customers ranging from automakers to farmers who use the lines to send ethanol, cereals and auto parts to and from Mexico or to be loaded onto ships. The top two U.S. railroads, Union Pacific Corp and Berkshire Hathaway Inc’s BNSF Railway, have suspended operations in the area affected by the storm, as has regional railroad Kansas City Southern.
  • Harvey raises cotton. Can September help grains?
    Many growers will indeed be glad to see the back of August. For southern US cotton farmers, the losses from Tropical Storm Harvey go on, with the US National Hurricane Center warning that “ongoing catastrophic and life-threatening flooding will continue across south eastern Texas”, where in some areas, including Houston, “isolated storm totals have reached 50 inches”. That is equivalent to more than 4 feet, or nearly 1.3 meters. “The flood threat has spread farther north and east, and additional rainfall accumulations of 3-6 inches with isolated amounts up to 10 inches are expected from south western Louisiana and the adjacent border of eastern Texas northeastward into western Kentucky through Friday.” The impact on New York futures on Monday was a further 1.3% gain to 70.85 cents a pound for December delivery – enough to see the contract close above its 100-day moving average for the first time in three months.

 

Summary:

Wheat futures were mixed today ranging from 1.75 cent up to 1.00 cents down. Buyers are nowhere to be found right now as far as Corn and Soybean was concerned. Corn was down ranging from 3.50 to 4.25 cents while Beans was down ranging from 4.75 to 8.50 cents. The narrative offers very little by way of reasons to purchase the grain or oilseed markets for the next several weeks. Once September and October have passed for the respective harvests, the markets will be able to recalibrate and look for potential upside thereafter. The US Dollar has been up the last two trading days and all the focus in the news is on the aftermath of Hurricane Harvey. We have a three-day weekend coming up soon and we could start to see a bit of pullback in the trading volume ahead of it.