Will The Grain Rally Continue?

Grain markets have rallied in October more than many fundamental analysts and traders thought would happen. Yes, I was surprised. I say many thought it could happen because the market for months has been headed lower and the tendency over the long run for reporting on markets is to go with the flow.


At the end of September, I wrote a report and thought October would move sideways to down. As I pointed out, going back as I did to 2010, it is fairly common.

Throughout my August and September reports I pushed for the grain producer that isn't hedged, October is about the basis, to get hedged. With a large crop basis normally widening it is a barometer for the futures market. It determines the price the farmer will receive in the geographic location where they grow their crops. Over the past few days the cash price farmers have been getting compared to the action on the futures has been the reason for many calls I have had from farmers. In many areas cash has moved opposite of futures. Cash prices have moved up with futures, but cash compared to futures cash has widened out. (more)

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