Headlines:
- THE NEXT USDA WASDE REPORT WILL BE OUT OCTOBER 12TH
- HEDGE FUNDS HIKE NET SHORT IN WHEAT TO RECORD TOP – BODING WELL FOR PRICES?
Hedge funds, deterred by data showing the biggest US wheat stocks in 29 years, turned their most bearish ever on Chicago wheat futures and options – ironically, raising hopes of support for prices of the grain. Managed money, a proxy for speculators, raised by a modest 3,959 contracts its net long position in futures and options in the main 13 US-traded agricultural commodities in the week to last Tuesday, according to data from the Commodity Futures Trading Commission (CFTC) regulator. However, the marginal change in the overall net long – the extent to which long positions, which benefit when prices rise, outnumber short bets, which profit when values fall – hid some more marked changes in holdings in individual commodities. In Chicago soft red winter wheat futures and options, the world benchmark, hedge funds raised their net short by 20,000 lots – the biggest sell down in three months. That took the net short to 151,417 contracts, by a distance the biggest on records going back to 2006.
Summary:
The Crop Progress report has been moved to tomorrow because of the Columbus Day holiday. The trading is looking for Corn to be about 35-38% completed and some estimates have the Soybean crop at 50% complete. The light rains from last week were not enough to keep combines idle and the progress for both is looking to be well ahead of last year’s pace.
The reality is that a choppy trading market should be expected over the next two days ahead of the USDA report on Wednesday. As far as Wednesday’s WASDE report is concerned the trade is estimating the Corn yield ranging from 169.5 to 175.2 bushels per acre (BPA). The production estimates range from 14.7 to 15.2 billion bushels and the stocks estimates at 2.181 to 2.662 billion bushels (BB). The Soybean numbers are very strong. Trade yield estimates range from 50.1 to 52.6 BPA. Production estimates range from 4.147 to 4.366 billion bushels and stocks range from 0.325 to 0.517 BB. Trade estimates for Wheat stocks range from 1.050 to 1.400 BB.
Grain prices were mixed today. Wheat was the big winner finishing up 9.75 cents and Corn was also up gaining 3.25 cents. Beans were down losing 3 cents.
