Market depends on harvest, trade news | Tn exchange
The harvest is here, and that means it is now a harvest season grain market.
As the market waited for the September 30 inventory report last week, it also paid attention to harvest progress and trade news from China. And it’s worth noting that it’s not just the end of the month but also the end of the quarter, which likely impacted some exchanges last week.
Something that can mean potential gyrations over the next week in the very short term, according to Don Roose, president of US Commodities in West Des Moines. Roose says there has sometimes been a tendency for the market to have a low harvest in the first week of October and then see a short-term rebound. Of course, he adds, there is no guarantee that this will happen in any given year.
Another news is that China has recently shown more interest in buying, and it’s still a boost for the market, Roose says.
From a practical standpoint, Roose says, the base is generally tight right now and there is some carry in the futures market. For some farmers, there may be local incentives to sell. For others, the situation means that it can be profitable to store grain for a few months, especially if they have on-farm storage.
Roose says farmers may want to consider strategies that allow them to use the futures market or sell grain and then use market tools to hedge on the upside. This may mean using tools such as inbound hedging contracts or synthetic hedges.
Regardless, the harvest is now underway in many areas and the market will be watching for early yields, as it always does. Farmers, Roose says, must continue to pay attention to markets as well as yield monitors over the coming weeks.