Another flash Friday morning of a couple hundred corn to China and corn up 1 1/2 at the end, 634 1/4. Wheat up 11 1/2 to 710 1/2 on short covering, and the funds have a big short to cover. Meal a dog and soy off 11 1/2 to 1476 1/2. No volume Friday for rice and we slip 9 cents, 1720. Hopefully the CFTC catches up commitments early in the week next week. Dow loses 413 to end the week 32,071. If there ever was a textbook week of computer churn enriching the few at the expense of the many, this was one. With a small bit of rounding, Tuesday up 300, Wed, down 300, Thursday up 400, Fri down 400. Difference between Monday and Friday close could be covered by a 10 year old. But its legal. Bonds up 2 points and 4 tics, 132.23. Its funny that long duration is what has all these banks in trouble, but to be safe and make money now you the public are being lead to own long duration. I'll pass up here.
Thursday exports solid in corn and beans, as well as three days in a row of 600K plus corn sales flashes to China. Corn up 6 1/6 to 632 3/4 with spreads tightening. Beans pick up 2 1/4 to 1491 1/2 with oil finally getting a bid and Palm possibly pausing. Bean oil needs to base because I just cant see meal holding. I've been awful early on that call though. Wheat takes a breather, 699, off 3 3/4. Rice closes up a couple, 1729, after taking another run at 1750. Commitments for 3/7 dropped after the close and funds were nearly out of their corn long but added back to soy and meal. Funds still net 2500 short old crop rice. We should get the final catch up after Friday close. Dow up 389 points, 32,484 and bonds off a point and 3 tics, 130.19, and nearly 3 full points lower than the highs of the day. Lots of people in the financial world praying the financial genie has been put back in the bottle. I'm not so sure.
Wednesday trade dominated by financials again. Dow off 307 points, 32,095 but we were down over 700. Bonds up a point and 24 tics, 131.22 but kissed 133 again. I will still argue we are near the top of the bond range without global meltdown. Credit Swiss got backing from the government so that is really off the table now. Grains were pretty solid all things considered. More corn sales to china and corn up 5 3/4 to 626 1/2. Wheat up 6 1/2 to 702 3/4. Soy leaked 4 1/2 cents, 1489 1/4 but really pretty solid action in the face of global money issues. Rice up 11 1/2 more as the funds continue to lose on their stupid trend follow systems, 1727. Only 386 liquidated out of a mighty big short position.
Dow churned to the upside Tuesday for 347 points, 32,402, while bonds set back a point and 19 tics, 129.30. Market wants to believe that the FED has things under control. Russia wants a 60 day corridor and Ukraine wants a year agreement so there is a bit of impasse in negotiations. Wheat up 11 3/4 to 696 1/4. Corn good for a 7 1/4 rally on 600K new china sales, 620 3/4. Beans up 2 1/2 to 1493 3/4. Rice bear getting smacked again as we rally 48 1/2 cents, 1715 1/2 while only 200 contracts get liquidated. Above 1740 the options add fuel to the fire.
Monday just another day where financials lead the news. Fed effectively ended monetary tightening and just injected stupid capital back into the markets, so looks like another summer of higher rates and higher inflation, which will exaggerate things even more down the road. All June in the financials moving forward for pricing purposes, Dow had what turned out to be a 850 point churn range and off only 110 points at the close, 32,055. Bonds traded the top of the range and settled back a point, 131.17, up 2 points 6 tics on the day. The headlines talk of the massive 2 year 10 year move, but if you push a string hard enough you get a violent snap back. Don't get lost in the overnight noise. Beans off 15 3/4 to 1491 1/4, corn down 3 3/4 to 613 1/2, and wheat got a 5 1/4 cent bounce, 684 1/2. All the grains lost open interest on the day. Rice bounce continues and the bear has no volume to cover his now upside down shorts, 1667, up 32 1/2.
Commodities took a back seat to the banking system to end the week as up to 3 mid-sized banks are facing default and one has been taken over by the FDIC. Dow closed Friday off 341 points and June bonds up a whopping 3 and 1/2 points. Fed has opened the discount window so the dress up paid off hugely for the big fish. I wonder if they even comprehend that they have been yet again played, on a biggly billions dollar scale? Surprised? Wheat got a 13 1/2 cent bounce from stupid lows, 679 1/4. Corn up 5 3/4 to 617 1/4, while beans leak 3 3/4 cents, 1507. Rice up 3 while the computer probes around to see where the sponsors are. Those of us in the commodities world are picking up nickels in front of a steam roller while the financial boys who mostly just push paper around rake in bushel baskets. There is way more money in creating fear than food.
Thursday exports good in rice and corn, soft soy. Open interest gains in this break tells us that the short side funds are getting more comfortable with a long term short position. Wheat off 21 3/4 to 665 3/4 and cheap global wheat is for now displacing other grain needs. Corn hit for 14 to 611 1/2. With decent exports. Beans off 7 to 1510 3/4 with soft oil. Rice bear finding this area a lot harder to push thru as I suspect Latin end users are getting some much needed coverage. 1631 1/2, plus 2 1/2. Dow hit for another 554 points in a tough week for equities, 32,259. Friday trade will try to shore up the week, but we are in precarious levels. Cali bank dropped 1.8 billion in a 20 billion long term debt roll. Not a big bank and not a big roll. This is why the FED has been so slow to walk back M2. And M2 is much too high still to find this big of a crack. Will be an interesting weekend in DC for the money boys.. Bonds up 16 tics, 125.27 and I'm going to guess the Fed is taking in long term debt to save big banks. Fed doesn't have to ever mark their balance sheet. We couldn't afford it if they did.
WASDE Wednesday was more build up than trade. Slightly friendly bean report and very friendly production drops for Argy brought a 2 1/4 cent rally in soy, 1517 3/4. Small bump in domestic corn but big drop in Argy supply and we are off 8 3/4 cents, 625 1/2. Wheat loses 10 1/2 to 687 1/2 on a nothing report punt. Rice seller at it again and report reduced exports, raised carry over even though it is now finally reasonable to export Arkansas for the first time this year. 1629, off 37 1/2 and into what appears to be more solid buying power. Time will tell. CFTC updated commitments to 2/14 yesterday after the close, so we are now less than one full month late on our data. Dow in a tight range, 32,813, off 51 and coiling. Bonds pick up 9 tics, 125.11.
Tuesday trade dominated by Powell testimony of higher rates for longer when many expected a small bump and pause after the March meeting. Powell is a lot more like Volcker and if true, all the rates will be going up more than the market wants or is pricing in. Tied to M2 reductions, a recession/depression is almost unavoidable to me. Sobering more than before. 32,864 Dow off 587 points and bonds pick up 14 tics, 125.02. Rice bear adding to volume and open interest as a trap is being set, 1666 1/2, off 27 1/2. Definitely catching some peoples attention. Beans off 13 1/2 to 1515 1/2 as meal didn't have any more follow-thru, Corn off 2 3/4 to 634 1/4 and wheat gets a small 2 3/4 bounce, 698. WASDE at 11 on Wednesday.
Monday meal firm again and soy up 10 1/4 more to 1529. Corn leaked 2 3/4 to 637 and wheat got hit for 13 1/2 cents, 695 1/4. Oats have also quietly gotten to new lows and low 3 dollar product is back in style. Rice bear gets a bearish technical picture to recruit some new sellers and we are off 41 cents, 1694. Dow has a quiet day, 33,451, plus 37 points while June bonds lose 8 tics, 124.20. Seems like other than meal the world isn't interested in Ag.
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