Try as you might, markets can’t escape politics

It feels like we’ve all endured a fair dose of political fatigue over the past couple of months after significant changes across the national and international stage, so I thought it might be a good time to focus on what’s directly in front of us. As discussed in recent newsletters, the traditional seasonal peak in [...]

Power plays

The “Boy Who Cried Wolf” feels like an increasingly apt analogy for both sides of the Iran conflict. This week alone we have heard repeated claims that the conflict is over, the Strait is reopening, diplomacy has prevailed and only minor details remain — only for the opposing side to immediately contradict the narrative. Markets [...]

Agatha Christie would be proud

A wheat trader recently said to me, “Good luck trying to trade this market.” To describe conditions as ‘choppy’ would be an understatement of the highest order. Perhaps this is what markets look like now the managed money crowd has largely exited the massive short positions that had previously dampened volatility. Perhaps it’s manipulation. Either [...]

The Good, The Bad & The Ugly

A big week in Ag markets. Sometimes, the good and the bad go hand in hand – nothing is simple, yet everything is entwined. The week started with a bang when the USDA released their May report. All eyes were on the US wheat production figures, and the USDA surprised even the most bullish estimates [...]

Oil Trumps Wheat

Grain markets did an abrupt about face this week. After weeks of steadily rising, ag commodities led by wheat erased a month’s worth of gains. The catalyst appeared to be easing tensions in the Mid East – or at least the rhetoric dialed down a notch – and rains in the US Plains stabilising the [...]

May Day for Wheat

Grain markets are firmly in the grip of the weather gods right now. The US HRW crop continues to draw attention, holding at 30% good-to-excellent despite last week’s frost event. Some of the forecast rainfall did materialise across the parched regions of western Kansas, though the Texas and Oklahoma panhandles largely missed out. There are [...]

Global forecasts for wheat tightening

As has become typical in this “new normal,” markets swung through another week of diametrically opposite headlines. Some of that volatility can be traced back to the ever-changing rhetoric out of the White House — the “Strait is open, no it’s closed” narrative feels almost theatrical. For now, though, wheat is taking its cues from [...]

Wheat market is being pulled in opposite directions

The constant flip-flopping in the Middle East is starting to lose its punch as a market driver. The latest move from the US to effectively blockade the Strait of Hormuz—halting most movement in and out of Iran—did little beyond weakening the USD and dragging equity markets lower. Commodity markets, by and large, followed suit. Except [...]

Dire Straits

Commodity markets are being pulled in multiple directions all at once. A tenuous cease fire announced this week brought a broad sell off, with crude oil plunging 14% at one point with wheat following suit. Confusion remains around what exactly a cease fire entails as conflict continues and the Strait of Hormuz remains effectively closed [...]

Beware the Headlines

Whether or not the “new way” markets operate is here to stay or not, this week was a clear example of headline driven trade impacting the market. Early in the week, Donald Trump posted on social media that “good, productive talks aimed at a complete resolution of the armed conflict” had taken place with Tehran. [...]

Markets are now pricing in higher energy costs?

I’ve spoken before about the role of speculators and managed money in agricultural markets. Realistically, something like 96% of participants in CBOT—or any other trading venue for that matter—couldn’t tell a wheat plant from a power plant. One of the key factors that had been capping prices and limiting rallies was the large net short [...]

Energy sector surge and weather market continues

The surge in the energy sector has also spilled over into alternative fuels, primarily corn ethanol and biodiesel. If the conflict drags on, pressure will likely mount to increase mandated blending rates to stretch petroleum supplies further. That would potentially strengthen the demand outlook for crops used in biofuels, particularly for canola, soybeans and corn. [...]