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November 7 Dan Maltby Marketing Newsletter

November 7 Dan Maltby Marketing Newsletter

Hello Kansas Wheat.
I saw quite a few of you in Denver; thanks for saying “Hi”. Markets remain subdued and boring, and conversations about sub-$3.00 cash wheat in the country quickly go flat, although I heard about a dozen interesting items.

Speaking of flat… KC Z16 shown here:.


I suppose a flat wheat market is better than a crashing wheat market, although I did hear (#1)… “once the market gets below loan price, you kinda wish it keeps going lower, as you get a bigger LDP.”
I read in the 11/4/16 Sosland Market Focus “growers in the Southwest (KS, CO, OK, TX and NE) collected $2,035,315 in loan deficiency payments in the week ended Oct/31 on 7,373,463 bushels, which is an average payment of 27.5c/bushel.”

I assume once the LDP is locked in, he probably would wish for a rally…

The KC Z wheat chart has a blue line at $4.45, which was the Aug.19 close, about 33c above Friday’s close of $4.12, which roughly corresponds with the LDP information. The chart also shows a red line at $4.03, which was the Friday close of Oct.3.

If a guy locked in his LDP, but didn’t sell his wheat…he’s vulnerable, and should expect sell-stops on a Friday close below the $4.03 area.

Whether we get those sell-stops is debatable, as Wednesday we will see the November USDA WASDE update, and Tuesday is finally Election Day!

I think we see flat markets the next couple of days, and after that…who knows? Things might get goofy.


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Source: KAWG