Fall rallies, incremental sales, and basis levels — a grain market LIVE! with Jon Driedger

Episodes:

There’s a market rally happening, but it’s harvest. What in the tarnation is going on with the grain markets? For that answer, we go to Jonathon Driedger of Leftfield Commodity Research, for this LIVE! Q&A.

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SUMMARY

  • Uncertainty leads to opportunity
  • Green on the screen in the futures markets
  • It’s super exciting if you’re a markets person, and perhaps if you’re the farmer, and if you’ve been pricing into rallies
  • Funds are causing some fun in the soybean complex
  • Funds buying is great for farmers, until they sell off, so manage that risk
  • Eventually, there will be pressure to sell, and if it goes up quickly, markets tumble even faster
  • OK, Chinese buying. China is looking for crop, some weather woes, and some chart signals turned higher — that has been pushing up markets.
  • Outside money can start flowing into commodities, and that can add some stability, and that’s not a bad thing
  • How do we know when China is really buying?
  • There’s a growing distrust of the information regarding Chinese buying and any information coming out of China. And for good reason.
  • Just such a huge market and buyer, even if we don’t fully trust China as a trading partner
  • Make those incremental sales. Even if it sounds boring. Take some risk off the table. Not necessarily the time to “trade paper”
  • This might be the uptick in the market for this crop year, so remember that (it’s not always about the futures, sometimes it’s basis that will make the difference)
  • Inversion in the futures months could form a pattern, so pay attention
  • Barley may end up tighter than you think, given numbers “on paper”
  • Whatever happened to oats? Yields were a little disappointing, for sure
  • We’re a long way from the corn lows that were predicted, what happened? There’s some vulnerability on the ethanol side
  • Durum should have some firmness going forward, could catch some upside later in the year
  • Yellow pea production was down a little, green pea likely flat, but pulse outlook is pretty good
  • Currency issues in face of U.S. election? A decisive win, regardless of the winner, is best for currency risk

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