RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Agricultural

Agricultural Markets Ahead of WASDE

Posted 03/07/2018 12:49PM CT | Michael O'Donnell

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

Michael O'Donnell

Mike started his career in the markets on the floor of the Chicago Board of Trade as a trade checker for a local market maker in the Dow Futures pit. This led to interning with an independent introducing broker and going on to work with a number of market participants including: speculating clients, hedge clients, introducing brokers, futures commission merchants, commodity trading advisors, proprietary traders, trading educators, system creators, and a number of international financial market participants.