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Agricultural Commodities Pre-June WASDE


  • Prices steady, but low as the growing season begins.
  • Soybeans break higher.
  • Corn holds $3 per bushel and moves to the top end of its trading range on the back of gains in energy.
  • Wheat remains within striking distance of $5 per bushel.
  • Strength in cotton- Animal proteins remain under pressure during the peak season of demand.
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On Thursday, June 11, the United States Department of Agriculture will release its June World Agricultural Supply and Demand Estimates report. The monthly WASDE is the gold standard when it comes to fundamental data for the agricultural futures markets. Volatility in the futures arena tends to pick up going into the report and in its aftermath.

We are now in the growing season for the 2020 crop. Each year is a new adventure for the grain markets and other products from the fertile soil around the globe. The demand side of the equation is always growing. According to the US Census Bureau, the world’s population increases by approximately twenty million, or eighty people million each year. Therefore, the pressure is always on producers to grow more crops to satisfy the rising demand. The summer months are a critical time as the weather conditions determine supply levels. A prolonged period of hot and dry weather could devastate crops. Mother Nature will be the most significant factor over the coming months.

The Invesco DB Agriculture Fund (NYSEARCA:DBA) holds futures contracts in many of the products covered by the monthly WASDE report.

Prices steady, but low as the growing season begins

Market participants have had a lot on their minds over the past month. The US economy is starting to reopen slowly. The coronavirus continues to claim lives and infect victims across the US and around the world. Unemployment in the US has skyrocketed with over forty million people filing for first-time benefits since March. Over the past weeks, civil unrest caused problems in cities across the nation. The stock market continued to rise, as low interest rates and the bullish trend since March caused capital to flow into equities. The unprecedented level of stimulus has begun to weigh on the value of the US dollar.

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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

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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