May 02-23 Concept of Market Ready
The concept of market ready is an underrated analytical term, and one that is rarely used. Closest alignment would be harvest pressure, but that is too narrow of thinking.Market ready refers to amount of grain that is accessible at any one time. There is no way to quantify it, rather aligns with market behavior specific to surplus or deficit. This is different than a myopic focus on a supply/demand. Market ready can correlate to crop quality, timeliness of harvest (start and speed), amount of on farm and commercial storage, price signals like flat price, desire by farmers to supply-push, number of country participants.
Examples of impaired market readiness align with tardy harvest, quality problems (example 2016 durum fusarium year, or couple lentil wrinkle years). Examples of fluid market readiness include better than expected yield, fears of lower price. Recent examples have been Brazil soybeans and corn. Cratered basis is indicative of too much market ready supply trying to find a home. An anticipated summer period is wheat because Black Sea & Europe should have lots to sell.
WRAP: There are moments when market behaves as if it is trying to ram a basketball size amount of volume through a garden hose. Best if understand market readiness.