Solid export sales Thursday morning put a floor in corn and beans, with corn gaining 9 3/4 to 534 1/4 and beans up 24 1/4 cents, 1430 1/2. Smaller gains in OI, and most OI gains are coming in new crop now, which to me is much more supportive in the big picture. Meal up better than $7 and wheat 9 1/2 better as well, 670. Rice closes 1315 1/2, plus 3 1/2, with fund buying and the last trading day of January behind us, abet with 50 new receipts out of Ottwell to carry. Nothing day in the Dow, 30,909, minus 50 and the bonds drop a point and 5 tics, erasing Wednesdays bounce. That was a short bounce.
Wednesday follow thru trade after the limit up corn close was rather muted as we closed only 7 1/4 higher, 524 1/2. Beans closed 12 lower, 1406 1/4, and 30 off the highs. Meal weak all day and off $8. Wheat held most of Tuesdays gains, only off 4 1/2 cents, 660 1/2. I would have bet that would have been the weak link on Tuesdays close. Some technical damage to the grain rally if we don't find our feet quickly. Rice up 27 1/2 to 1312 as it appears funds have rediscovered rice after a 6 month hiatus. Dow in a nothing day, 30,959, off 15 points, while bonds finally get a bounce we have been looking for, 169.12, up a point and 6 tics.
USDA did not disappoint Tuesday. Feature was tighter stocks both domestic and global in corn with a 517 1/4, limit 25 higher close. Synthetics worth at least a dime more. 39K pop in corn OI split between old crop and new. Wheat up 30 1/4 to 665 on the back of corn and talk of Russia increasing export taxes again. Meal up $19 and beans pop 45 3/4 to 1418 1/4. CO down to 140 and I can pencil it a lot lower in the future do to exports. The bean rally was without a big pop in OI, but rather the short stuck and paying up. Rice up 26 1/2 to 1284 1/2 with LG Carry over dropping back to 26 and change, right on my working 27 number. It does allow the USDA to pull back in domestic and residual in the future. I wish they would have dropped carry in. Dow closes up 72 points, 30,974, up 200 points from the low. Seeing the trend? I would caution that once a trend becomes obvious it generally stops working, at least long enough to take your money. Bonds close 5 tics lower, 168.06 after putting a new 167.11 intra-day low in and pivoting. Probably enough for now in this wave.
Monday trade just evening up in front of the Tuesday WASDE report at 11. OI down in every grain as some of that spec long profit is put in the bank. Corn soft all day and closes 4 lower, 492 1/4. Wheat down the same 4 cents, 634 3/4. Beans off 2 1/4 to 1372 1/2 with meal $7 stronger. Surprised at the meal strength to be honest, but you better respect it. Rice off 8 to 1258 with 20 deliveries. New Harrisburg receipts registered. Dow closes off 91 points, 30,902 but 250 off the lows as again some system chooses to buy the market late to put on the prettiest dress up possible. Radar up. Bonds off another 13 tics to close 168.11, after setting another contract low, by the smallest margin. Death by 1000 cuts I guess. Would expect some form of a pop in the bonds at some point, as the bottom side so far hasn't been able to attract a new push. Hopefully there is enough of a pop to justify a sell if you need to protect some of these rates.
Friday had a continuation in the bean rally, 1374 3/4, plus 19 1/2, with meal gaining $7. OI was up 3K but that was all new crop, so as the farmer is hedging new crop, its getting soaked up and the commercial is stuck short more old crop than he can cover. Front is where the funds are winning. Corn up 2 1/4 to 496 1/4, but another 18K increase in OI. 10K of that is in new crop, but corn is the grain that I could see the front take a break in first. Wheat off 3 1/2 to 638 3/4, to end the week lower by small change. Dow closes 30,993, plus 51 but 300 off the lows and marched up for the settle. Bonds trade down to 168.05, new lows, and close 15 lower, 168.24.
Disappointing export sales Thursday morning lead to a soft Ag open but mild recovery thru the day. Corn closed off a penny, 494. Beans gave up 6 1/4 to 1355 1/4. Meal was the weak leg off $6. Wheat down 5 1/4 to 642 1/4, but that is still a solid price for wheat. Rice in a pretty quiet day, 1270, plus 1. We saw small new bean deliveries, and 200 new rice out of Crop Marketing, McGehee. Dow continued its march up to new highs, briefly above 31K and closing 30,942, plus 222. Bonds put in a new contract low and closed off 16 tics, 169.07.
Corn trades 502 on Wednesday, but fades to 495 to close 3 1/4 higher. OI continues to build. Beans 14 1/2 higher, 1361 1/2. Rice up 8 to 1269 and a curious 200 lot spread appears to have traded in January so you can expect new deliveries. Near full carry, so it makes little sense. Wheat stepped back 6 1/2 cents, 647 1/2. Dow expanded the top side to 30,720, plus 435 while the bonds dropped 2 full points, 9 tics. We knew the bonds were lulling the world to sleep, but the inflation trade is starting to show its ugly head. This may in fact be the biggest struggle of the next administration. That is a bold statement not made lightly.
Tuesday trade more of the same as far as fund re-balance, although OI says the funds didn't buy as much as most people would think. 10K up in beans, 12K in corn, a lot less than Monday. Corn rallies 8 to 491 3/4 as sellers didn't have the desire to push like Monday. Bean up 34 to 1347 and that close came with someone waiting to sell a big order late in the day. I would think the seller expected more of a drop, but that's just a guess. Wheat gains 12 to 654 and nothing bearish coming out of the EU/Russia as wheat is looked at more for a feed replacement all around the world. Rice off 11 1/2 to 1261 as sellers try to push down, but bidding emerged. 7 new Harrisburg receipts out. Dow in an up churn day, 30,285, plus 181, while bonds drop a point and a tic, 172 even.
New year trade Monday welcomed everyone back with what is perceived to be new fund buying out of the box, and selling the rest of the day. Corn settled off 1/4 cent, 483 3/4, after putting in new highs 14 cents higher and adding 19 K to OI on the day. Commitments has the funds up 66k on the week at 322K combined. Those numbers and that action makes me wary of a top, but, as we saw in rice last year, funds don't really have any limits to constrain them, and there seems to be more money in fund pockets than ever before. Same story in beans, 1313 settle, plus 2, but 36 cents off contract highs of early in the morning. 27K pop in bean OI and meal was off $6 as the spreads lose premium and Argy gets moving again. Wheat closes 642 after posting a new 650 high. Rice up 3 1/2 to 1272 1/2 with some of the same action, but rice deliveries are current and shouldn't be a factor for the rest of this cycle. Dow helped drag the market psychology down thru the day as we were over 600 lower, eventually settling down 393 points, 30,104. For now I'd say the computers are just opening up the range so they have more running room to churn. Bonds off 5 tics, 173.01.
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