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Harvest lows settling in

Photo by Ben Nuelle

The U.S. Department of Agriculture today released its weekly Grains Inspected for Export. While the export numbers were strong, they were not enough to lift the grain markets. A market strategist discusses what will be influencing the grain markets this week.

The U.S. Department of Agriculture (USDA) reports 1,030,267 million metric tonnes of corn, 784,752 metric tonnes of soybeans and 406,004 metric tonnes of wheat were inspected for export, for the week ending August 13th.

Zaner Group market strategist Brian Grossman says the numbers were “not bad.” The strong numbers, however, were not reflected on the Chicago Board of Trade (CBOT). Grossman says a couple factor are weighing on this week’s markets.

“Tariff news is one of the big factors,” Grossman said. “We are waiting for China’s reaction to the next round of tariffs. I’m sure that is putting some pressure on. Also, we are still in the seasonal tendency for the markets to drift sideways or lower.”

Grossman does not see a turnaround in the markets, especially with harvest pressure knocking on the door. However, he encourages farmers to ride out the seasonal lows, citing weather and South American planting.

“Eventually we are going to come out of the seasonality of harvest lows,” Grossman said. “Fundamentals don’t necessarily drive the market up or down; they help give a direction. One thing I do want to point out is managed money is holding a bearish bed, a little bit greater than what they typically would do at this time of year. If we would run into any kind of weather problem in South America, that could quickly startle managed money and give us a bit of short covering rally.”

Grossman advises growers to take “quick” advantage of these rallies, especially with large inventories present.

For additional marketing advice, call Brian Grossman at (312) 277-0119. You can also  follow Grossman on Twitter, @AgHedgeGrossman.

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