Agricultural Markets ahead of WASDE

March 7, 2018 12:49PM CST

As agricultural markets prepare for the USDA World Agricultural Supply and Demand Estimates (WASDE) tomorrow, the markets are heavily anticipating the report for many reasons. The main reasons being the dry, drought conditions affecting the harvest in Argentina and South America as well as the combination of dryness and flooding in areas of the wheat belt in the United States.

While the soybeans and wheat markets have priced in these bullish factors, the markets will be heavily anticipating if it has been too much or not enough.  Meaning, depending on the outcome of the report, markets will be interested to see if the pricing in of these weather factors has been overdone or underestimated.  Many experts have revised their Argentinian estimates to the downside, and just yesterday I spoke with a farmer who typically has his land underwater on the Ohio River, but it is twice as deep with this year’s flooding.

We also wonder given the bullish price action in soybeans, even though many farmers stick with their allocation among land and certain crops, will the attractiveness of beans take acreage from corn?

To discuss some of the ways to position amid this report and others, please contact me at your convenience.

Soybeans May '18 60min Chart

soybeans_may18_60min_char

 

Wheat May '18 60min chart

wheat_may18_60min_chart

RJO Futures | 222 South Riverside Plaza, Suite 1200 | Chicago, Illinois 60606 | United States
800.441.1616 | 312.373.5478

The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that RJO Futures believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades.

This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.

Distribution in some jurisdictions may be prohibited or restricted by law. Persons in possession of this communication indirectly should inform themselves about and observe any such prohibition or restrictions. To the extent that you have received this communication indirectly and solicitations are prohibited in your jurisdiction with registration, the market commentary in this communication should not be considered a solicitation.