Markets refired after the long cold weekend Tuesday softer most everywhere. Wheat off 14 cents and a bit of a surprise in the weakness, 582. New shorts to the tune of 6200 march futures was the driving feature. I don't consider these to be long term trades as much as short term trend followers. Corn off 3 1/2 in sympathy, 443 1/2 and 17K of new OI shorts there as well. Rice down 11 1/2 to 1755 1/2. River is still busy. Beans did get a 3-cent bounce to 1227 1/4 on the back of meal strength as new March meal shorts ran for the door. Dow was off 400 and closed down 239 points, 37,553 while bonds got spanked for a point and 26 tics, 121.02. Still in the big sloppy bond range but as we look at 120 the big money boys have to be wondering if they have a firm grasp on this lion's tail or not.
Friday WASDE was a bit of a bearish surprise with yield increases in corn and soy. Corn hit to 441 before recovering to 447, still off 10 3/4 on the day. Beans trade clear down to 1203 before a solid bounce back, 1224 1/4 close. Off 12 1/4 but shows that the funds are probably a bit overextended in corn and beans. 596 wheat drops 7 3/4 to 596 but mostly in sympathy with corn. Rice got a bearish stocks number which I can't agree with, and the market didn't either, 1767, plus 15 cents. Add to that the exports number is woefully understated. Dow off 135 points to close 37,792 and a bit of a shock that the Friday window dressing didn't make the cut. Could be an interesting Monday in equities. Bonds up 5 tics, 122.28.
Nothing exciting in exports Thursday morning but none were expected. Most prepping for a dull to negative WASDE report Friday. Corn off 1 3/4 to 457 3/4 and another 20K increase in open interest here in the hole. Beans unchanged, 1236 1/2 but gave up a dozen cent rally. Wheat off 7 to 603 3/4. Rice picked up a couple to 1752 and river still busy. Dow had to rally 300 points to get back to 37,927, off 9 points but sure feels more like being defended than owned. Bonds up 18 tics, 122.23.
Hump day saw some pre-positioning in front of Friday WASDE reports. Corn held Tuesday gains, 459 1/2, plus 1/4 as did wheat with a 3/4 better close, 610 3/4. Beans hit for a dozen as some are getting bigger Argentina yields. 1236 1/2. Rice slips 9 1/2 to 1750 and cash is still in play to the river. Dow got a solid 173-point bounce, 37,936 and bonds are stuck for now, 122.05, off 8.
Tuesday did give us a bit of the old Monday/Tuesday trade action as corn regained 4 1/4 to 459 1/4. and wheat bounced 13 3/4 to 610. Beans struggled to gain 3 cents, 1248 1/2. Rice closed 1759 1/2, up 10 1/2. The Dow faded to off 170 points at the end of the day, 37,763. Bonds slipped 4 tics, 122.13. My original work had a 120-122 equilibrium, but the computer expanded that range two points on either side to 118-124. When it breaks out of that range, we need to get our radar up for the next financials reset. In the meantime, it's just noise.
Monday starts the first full week of trade in the new year with the world drinking the soft-landing Kool-Aid for another day and excess food the world over. Dow nearly 500 points off the lows even with Boeing issues, 37,933, plus 214. Wonder what follow thru will ensue. Bonds up 16 tics in a pretty lame trade for trying to set a base, 122.17. Corn loses 5 3/4 more, 455 with 20K of new sellers adding to a 200K+ fund short. 1245 1/2 beans are off 10 3/4. Wheat surprised me off 19 3/4 cents, 596 1/4. Hoping that was just Monday/Tuesday action. I'm going to discuss this a bit further in private notes today. Rice off 13 1/2 cents, 1749 but the 3-way player is back in September, as well as a bid in Feb.
Friday a bit of a dog as we saw increases in shorts from the funds pretty much everywhere and beans are now net short. 1256 1/4 beans off 11 1/4 for a poor weekly painted close. Corn off 5 3/4 as well, 460 3/4. Wheat holds a 2 1/2 cent gain, 616. Rice shorts got hooked for a 33 1/2 cent gain and the river is busy, 1762 1/2. Dow had a decent sized churn day and a 200-point bounce from the lows to close up 4 points, 37,719 while bonds needed a big bounce to still end off 26 points, 122.01.
Export sales delayed to Friday, so Thursday didn't really have much fuel. Corn recovered another 1 1/4 to 466 1/2 and there are the first whispers of how Brazil first crop soy issues will affect second crop corn. It will take another few weeks for that conversation to mature. Beans couldn't get anything going and the ongoing meal fund long liquidation as well as new fund shorting beans put us 9 1/2 lower, 1267 1/2. Wheat popped 13 1/4 to 613 1/2 after we held the buck yesterday. Transfer of ownership in the rice from weaker hands to stronger as we close 1729, off 2 1/2. Bonds off a point and 9 tics, 122.27 while the Dow closed up 18 points, 37,715 but the Dow lost 250 points from the high and a weak showing in all.
Financials a bit jittery Wednesday with the Dow dropping 296 points, 37,697 and bonds looking lower before a rally back to 10 tics better, 124.04. Fed minutes not as dovish as trade has been. Little bounce in corn, 465 1/4, plus 1 1/2 and Soy, 1277, up 3 1/2. Wheat had to probe $6 but held, 600 1/4, off another 6 1/2. Rice computer saw a crack after yesterday's big run up and took it all back, 1731 1/2, off 71 1/2. If you are going to play rice futures, you better bring a big margin check. Export sales delayed until Friday morning.
The first trading day of the new year brought selling pressure as it looks like new fund allocations got placed on the sell side to add to a mostly short existing position. March beans drop 24 1/2 to 1273 1/2 while wheat gets hit for 21 1/4 to 606 3/4. Corn off 7 1/2 cents, 463 3/4. Every day we get closer to SA harvest and sales puts pressure on the US to get more product moved. Rice the one outlier with a 51-cent pop, 1803. Cash is 8$ bid in a few places. Dow off 19 points but soft, 37,993. Bonds off a point and 4 tics, 123.26. Yearend push up of financials is meeting profit taking.
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