The punters are in control.
If the USDA remains in shut down mode we will not get this weeks monthly USDA WASDE report to ignore. As much as the WASDE can be a love / hate report, one everyone loves to pick apart and criticize. It plays an important roll in the market. Not unlike what the wheat pool used to play in marketing. The WASDE resets some numbers and becomes a base for many analyst to advise from. Just like the pool use to set the base price for the trade and the producers to work with. Without the WASDE it’s not the end of the world, but it does make it a little harder to wade through the numerous speculative wires on what “is” happening globally.
We all know that headlines can be bought. Traders talking their book get more traction than the might if there was a check in place. I think it’s great personally. If you are only relying on the WASDE to guide you than you may have forgotten how to read weather maps, talk to farmers, talk to consumers, analyse port bookings. This day and age the ability to talk to a producer, broker or traders from your home town to another country isn’t much different. If you remove the WASDE there’s 100 other reports you can use. So why does the WASDE get so much traction, we know it’s often 30 day old data, but we also mostly assume it’s impartial. This is the key.
During the last major US government shut down, Dec 22nd 2018 to Jan 25th 2019. I might add a much better timed shut down than this one. Nearby Chicago wheat futures traded a very narrow range, on the 22nd Dec SRWW futures closed at 514c/bu, on the 25th Jan they closed at 520c/bu. On October 1st this year wheat closed at 509.25c/bu.
Gold continues to move higher as “fear” over global economic conditions increases. Do we want a 50c AUD, maybe just a little, it’s about the only way I can see AUD$90 rally in the price of local wheat. Will it happen, probably not. Not much else is going to break this range bound market though.