There have been some interesting developments in the cash markets for both corn and soybeans recently that have had many analysts and traders scratching their heads. While strength in spreads is not unheard of as harvest wraps up and supplies get tucked away, the strength we have seen, especially in soybeans, where there is talk of tepid demand and burdensome supplies feels out of place.
As I have discussed many times before in this space, cash is king. Moves in the cash market give us greater insight into whether it is getting easier or more difficult for the world’s end users to source supplies. While we can look to the USDA and other government entities around the world to give us an outline of what they anticipate for supply and demand each year, it’s the moves in the cash market that tell us the true story of what is happening at ground level.
