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Planting Season Starts On A Bullish Note


  • A rally before the first seed goes into the ground.
  • Beans move on a rally in meal.
  • Corn is watching a ratio.
  • Wheat feeds the world.
  • Five years of bumper crops do not guaranty a sixth.

The season of uncertainty is getting underway in the grain markets. The harvest season in South America marks the start of the crop year north of the equator. Over coming weeks, farmers in the United States and other countries in the northern hemisphere will plant the seeds that will become the crops that feed the world. In the first quarter of 2018, global population increased by approximately 19.5 million people. In 2000, at the turn of the century, there were 6.145 billion inhabitants of the earth. As of April 1, 2018, that number stood at over 7.464 billion. More people on our planet, with more money, compete for finite natural resources each day which puts pressure on the demand side of the fundamental equation for food products.

Nutrition is essential for people all over the world, and the 2018 crop year will feed the ever-increasing number of hungry mouths. Each year is a new adventure when it comes to crop production as the weather determines the output. The United States is the world’s leading producer of corn and soybeans and a significant exporter of wheat. The world has become addicted to sufficient crops from the U.S. and other producing countries.

A rally before the first seed goes into the ground

In early March, the prices of the primary grains that trade on the Chicago Board of Trade division of the CME futures market moved appreciably higher. A drought in Argentina damaged crops which sent prices soaring.

Source: Barchart

The price of May soybean futures exploded to a high of $10.825 per bushel on March 2. Gains in soybean meal, a product of the oilseed, took soybeans to the highest price of the year as meal traded north of $400 per ton. After the USDA released its March WASDE report, the price of the beans corrected to a

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This article was written by

Andrew Hecht profile picture
Weekly commodities commentary and calls, from a Wall Street veteran
Andy Hecht is a sought-after commodity and futures trader, an options expert and analyst. He is the #2 ranked author on Seeking Alpha in both the commodities and precious metals categories. He is also the author of the weekly Hecht Commodity Report on Marketplace - the most comprehensive, deep-dive commodities report available on Seeking Alpha.

Andy spent nearly 35 years on Wall Street, including two decades on the trading desk of Phillip Brothers, which became Salomon Brothers and ultimately part of Citigroup.

Over the past two decades, he has researched, structured and executed some of the largest trades ever made, involving massive quantities of precious metals and bulk commodities.

Andy understands the market in a way many traders can’t imagine. He’s booked vessels, armored cars, and trains to transport and store a broad range of commodities. And he’s worked directly with The United Nations and the legendary trading group Phibro.

Today, Andy remains in close contact with sources around the world and his network of traders.

“I have a vast Rolodex of information in my head… so many bull and bear markets. When something happens, I don’t have to think. I just react. History does tend to repeat itself over and over.”

His friends and mentors include highly regarded energy and precious metals traders, supply line specialists and international shipping companies that give him vast insight into the market.

Andy’s writing and analysis are on many market-based websites including CQG. Andy lectures at colleges and Universities. He also contributes to Traders Magazine. He consults for companies involved in producing and consuming commodities. Andy’s first book How to Make Money with Commodities, published by McGraw-Hill was released in 2013 and has received excellent reviews. Andy held a Series 3 and Series 30 license from the National Futures Association and a collaborator and strategist with hedge funds. Andy is the commodity expert for the website about.com and blogs on his own site dynamiccommodities.com. He is a frequent contributor on Stock News- https://stocknews.com/authors/?author=andrew-hecht

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The author always has positions in commodities markets in futures, options, ETF/ETN products, and commodity equities. These long and short positions tend to change on an intraday basis.

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