Deliveries started Friday and so did a few squeezes. May corn up 38 cents, 740, with July up 25. Wheat only up a nickel, 742 1/2. Beans popped 28 1/2 to 1571 as bean oil flirted with 300 higher. Rice only up 1 1/2 with some pretty heavy deliveries, 1338 1/2. Those rice deliveries are at carry and are pretty much a function of banking for a smaller player to me. Will be switching to July futures on Monday quotes moving forward. Back and fill day in the Dow, 33,767, off 184, while the bonds lulled to sleep 157.08, plus 2 tics.
Thursday pre delivery trade kind of a reversal of Wednesday. Corn up 15 3/4 to 702. Wheat gained 12 1/4 to 737 1/2. Beans slipped 15 1/4 to 1542 1/2 with oil giving up near 300 points and deliveries expected, but expected to be used. Rice pops 20 1/2 cents, 1337, and we should get some pretty reasonable amount of rice delivered. Dow gains 227 points, 33,951, and bonds slip 10 tics, 157.06.
Big ranges in Ag Wednesday as corn closes 9 1/4 lower after a 40 cent range, 686 1/4. Wheat off 8 1/2 to 725 1/4. Bean oil limit up again and beans up 8 cents, 1557 3/4. Rice was up 3 to 1316 1/2. First intentions tomorrow so make sure you are out of your may positions by the close. Dow off 159 in a back and fill day, 33,724, and bonds pick up 2 tics, 157.16.
So many new calls got into the money in the Ag room thru the week, and the short sellers got killed. Wont be many tears shed for the decay guys. After a soft start Friday, all the grains got another bid going, with corn settling up another nickel, 655 1/2. May/July spread 23 over and oats traded 410. although they did back off to 399. Corn open interest gave up 39k in liquidation so this is an options assisted short squeeze. Rice up 7 cents, 1343 with spread liquidation and 350 new calls in the money for the week. Does someone want the receipts? Spread has enough carry a real commercial could step in and lift 1000 from the bankers for awful cheap, and control a chunk of inventory for the summer. Beans give up 20K of OI with May options settling, and gain 6 1/2 to 1539 3/4. Wheat stalled Friday at 710 1/4, unchanged, but holding nearly 60 cents of rally on the week. Up a day, down a day Dow ends the week on an up note, 33,941, plus 232 points. Bonds slip 5 tics, 158.09.
Herd mentality took over in the Ag room as corn explodes limit up 650 1/2. There wasn't much of an over bid though. Wheat briefly traded limit but closed 37 higher, 710 1/4. Beans were good for 36 cents, 1533 1/4, with oil near limit up and meal up $10. Rice sellers disappeared and the long had his way there as well for 49 1/2 cents, 1336. We just put a lot of out of the money calls into the money and tomorrow is the day of reckoning for a bunch of newly minted positions. Dow took away all Wednesday gains in a churn trade that has the ranges starting to open up. 33,709. Time to be more cautious in the financials. Bonds up 10 tics, 158.14.
Wednesday grain markets gave a chance to buy if you were quick, then off to the races. Ethanol is 1.20 now and that makes corn a much in demand domestic product. I expect at some point USDA will have to increase domestic pull and exports, from an already tight number. Corn up 19 cents. 625 1/2. I had congestion in the 621-625 area, but the market sure doesn't. Cut thru that like a hot knife thru butter. Wheat up 13 1/2 to 673 1/4. Rice was more spread roll and small long liquidation, but still closed 2 1/2 higher, 1286 1/2. Bean oil hot again with no top in sight, and beans up 25 1/4 to 1497 1/4. The options guys who write cheap calls for the decay getting killed for their efforts this time around. Dow up 313, recovering all yesterdays loss and then some, 34,016, while the bonds took the day off, 158.04, minus 1 tic.
Bean market lit up Tuesday without any real stories for 22 1/4 cents, 1472. Maybe the big call short is getting nervous? Oil was hot again(200 higher) and meal was up a couple bucks, although the spreads weakened a bit. We still have a few weeks of excess meal supply to chew thru. What is important to me is we could continue this bean rally without anything big in the news front. Corn up 14 1/2 to 606 1/2 with some strong basis quotes for cash out there. Wheat closes 659 3/4, up 7 1/2 on the day but well off the highs. Rice in yet another dead spread roll day, 1284, off 1/2. Rice is stuck between a bit too much supply currently and a known shortfall coming at us in the year ahead. Dow off 255 points, 33,703 with a desire to catch its inflation driven breath, while bonds rally 21 tics, 158.05.
Interesting Monday trade in the beans, as meal gets some footing for a $5 pop and beans pick up 16 1/2 to 1449 3/4. Wheat just stalled at 652 1/4 and corn gains 6 1/2 to 592. Ethanol is still gaining and that encourages the grind. Rice off 3 1/2 in a pretty nothing day, 1284 1/2. Dow in a back and fill mode Monday, 123 lower close, 33,958, while bonds continue to give back last Thursdays one day pop, 157.16, off another 16 tics.
Friday saw Wheat stall, off 1 1/4 cent, 652 1/2. Its a feed replacement for corn in lots of places in the world, and it is helping keep a lid on corn, at least for now. Hard to make ethanol out of wheat though, and the sorghum that would have been in the bio mix this summer has already left on a slow boat for china. Corn off 4 1/2 to 585 1/2. Funds don't seem too interested in pushing down just yet. Summer driving season is almost upon us, and ethanol is mighty pricey, which will encourage the corn grind. Bean oil re-found its mojo for 140 points and beans followed suit, 1433 1/4, plus 15. One of the rice longs just gave up in the roll trade and liquidated about 300 longs, 1288, minus 17. Down into stacked up bids at the close. Dow continued the march up to close out the week 34,081, up another 158 points. Bonds dropped a full point to 158 even on Thursdays overblown rally rejection.
Tax day Thursday had export sales soft and reasonable shipments. Little rain talk is sneaking into the Brazil weather forecast to allow for some late pressure on corn, 590, minus 4, after trading to 601 for a new high. Wheat looked lower early but recovered to 5 3/4 higher on the day, 653 3/4. Meal and oil both had a bid, and beans gained 8 1/4 to 1418 1/4. More spread roll in the rice and some long liquidation to go with it, 1305, off 11 1/2. There is a fair piece of government give away rice going out the door in the next month to keep the mills running. Dow up to 33,923, plus 299 and another new high. Bonds rip 2 points and 4 tics higher, 159 even, with some wanting to believe that we can financially engineer prosperity with low to no rates in perpetuity. It will be ugly when that comes home to nest, but it might just take a while to happen.