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November 8 Grains Commentary: Scott Shellady

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- Scott Shellady: Another one on the blocks today. We had the WASDE out in Chicago, and boy oh boy it did not disappoint. I'll talk about what I think about the WASDE at the end, but let's first of all talk about what the numbers do. Well, they came in kind of bullish for corn. We dropped bushels per acre, we dropped production, and the headline numbers, which are what everybody looks at, kind of shot the market a little bit higher, the buyers came in. However, when you take that thing over to the side of the road and lift the hood up and really kind of take a look at the engine, it kind of disappointed. And that was really due to the fact that we had China. Wouldn't it be nice to trade a product that you didn't have to worry about China? Well, they've added some world ending stocks numbers, much higher than we were expecting. And that really kind of ruined the parade and rained on that parade. And we saw corn kind of sell off on the back of that. Now, the good news is that at the end of the day we basically settled sharply unchanged, basically. But it was a rough ride because of the headline numbers, hey, we all got excited, and then we kind of had to take a look under the hood. And we didn't get as excited, actually it was kind of bearish. The trade is arguing about whether or not they had to put those numbers in there a week before the G20 anyway. So that's going to be something that you're going to see written about tonight. But in the end, the world ending stocks numbers were much, much higher than expected. I think we got a 159.2 versus last month's 159.4. Those were the expectations. Well hey, we got something over 300 this time, and that's not good if you're a bull. So that was a big problem. And lastly, this is the USDA and the Fed sometimes remind you of each other. It's because these projections and these forecasts, some of these things are very, very difficult to kind of keep in your mind's eye. And I think that sometime they're so binary and they affect the market so much, but sometimes they might not really be true. It's hard to trade, and I can understand the traders being really kind of frustrated by that, suddenly putting all that corn in there for the world ending stocks, really kind of catching traders wrong-footed. So sometimes the USDA and the Fed to me look a lot alike. So that's it for me, I'm Scott Shellady here in Chicago. I'll see you again next week.

Video Details

Duration: 2 minutes and 22 seconds
Country: Andorra
Language: English
License: Dotsub - Standard License
Genre: None
Views: 6
Posted by: cmegroup on Nov 8, 2018

November 8 Grains Commentary: Scott Shellady

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