They say, “the quickest way to the poor house is to trade government numbers”. Some will attest to that statement in recent weeks. Much has been said, and lots of heads are scratching on the monthly WASDE reports (estimates) from the USDA.
Look to buy beef tenderloins. Although they are higher y/y, the difference (3.47%) is not nearly as much as almost all the other beef items and they are entering a bottoming period on the seasonality chart.
For HRS specifically, the USDA is projecting a 22% year-over-year increase in HRS ending stocks, the highest since 1987/88. That, coupled with relatively weak dependence for higher protein HRS wheat for blending purposed, bodes bearishly for HRS wheat. HRS demand is weakened, even with the drop in the average protein level in HRW wheat this year, by large stocks of high quality and high protein HRW in storage.