Weather finally appears to be getting the attention of traders as harvest delays continue across the Midwest. With forecasts for rain thru the middle of next week for the majority of the upper Midwest we are seeing the funds cover some of their long standing short positions. The concern over lost yield in soybeans and poor quality in corn due to the excessive rains has gained some momentum this week.
The funds have reduced their short corn position by 22,000 contracts in the last week. Soybeans shorts have only been reduced by 5,000 in the last week.
While we have seen and may see some more short covering with the weather premiums the size of this years crop does not appear that it is going to shrink enough to send the markets significantly higher. I look for this to be confirmed next week in the USDA’s October S&D report that will be released on Thursday. Private analysts are expecting both corn and soybeans to be higher than the USDAs September report by as much as 1 bpa on corn and beans.
Producers should take advantage of the recent rally by making small sales for December and January to core out there bins with prices in the $3.50-3.60 range. Producers should also be making small sales for the fall of 2019 with prices in the $3.70 range.
Have a Safe weekend!