Month end trading Wednesday With follow thru selling early getting no company and we bounce the rest of the day. Corn fully recovered to 594, unchanged. Beans and wheat get 3 1/4 higher to end 1299 3/4 and 594 1/4 respectively. Rice pops 26 cents, 1729 and there was a reshuffle in options with an upside bias. I would not short July rice and would not be in at all other than a small gambler share for those with that inclination. Options bias is to $18 for those looking. Dow off another 110 points, 32,979 and bonds up another 28 tics, 128.02. Just looking at some of the lower range of the Dow big picture churn and bonds are in no mans land. We are in an area where funds can have outsized effects as we saw on Tuesday, but hopefully you can see that most of this is designed to make you act irrationally. They profit from your fear. Or greed. Something to remind yourself of probably numerous times this crop year.
Some of the extended forecast heat softened over the weekend and some moisture showing up in extended as well. Nothing out of the Russia corridor so ultimately the weekend didn't provide any fuel for the Friday bulls. Set us up for a bloody Tuesday and as Friday rally faded, we brought in new sellers and long pukes. Soy complex pounded with beans off 40 3/4 to 1296 1/2. Wheat drops a quarter, 591. That puts a drag on corn with a dime loss, 594. I would not be surprised at a decent bounce of overdone trade, but I think we just need to get thru June and the excess Brazil supply. Back to the standard of growing a good crop, I don't believe now is the time to make any kneejerk sales. Rice off only 4 cents, 1703 and very thin. Dow in a standard churn trade, minus 36 points at the end, 33,089 and bonds gain a point and 18 tics now that upside June calls have expired, 127.06.
Markets showed they were tired of the down fund push Thursday, and it didn't take much for a Friday bounce. Short fund covering in corn was good for 13 1/4 cent bounce in July futures, 604 close. 616 wheat was a 11 3/4 cent up move. Beans gained 13 1/4 to 1337 1/4. Heat and dry is already a story. Rice bear couldn't defend, and we moved up 47 in the front, 1707. Thats some quick in and out fund action across the grain floor this week. Bonds up a couple tics, 125.20 and the Dow popped 319 points, 33,125. There was plenty of room in the churn for that action after the downward push trade all week.
Thursday exports brought no curve balls and we are just trying to find an area to settle into. Funds are huge short wheat and can keep a lid on that crop until they flinch, but I struggle to see the money in any push down from here. 604 1/2, minus 2. Corn up another 3 1/2 providing a solid recovery this week from fund driven shorts, 590 3/4. Ethanol still profitable and providing a domestic bid. Soy off 1/2 cent at the end, 1324. Rice closes 1660, minus 1 1/2. Open interest has several new players adding short July long Sept spreads and lots of talk that they have to converge. Fair warning, they don't have to converge. I don't know who put that story out there or who is spreading it, but there is a bunch more risk than the surface shows. Personal note, I believe my biggest loss in over 30 years of futures trade was that spread. It could close 50 cents or 5 bucks. Or both. Most have no business with anything related to July rice in their accounts right now. End of rant, but please take note.
Grains acted independently Wednesday trying to find new pricing relationships. Corn up another 9 3/4 to 587 1/4 while wheat dropped the 16 cents it gained Tuesday back to 606 1/4. Beans were 15 better but faded to 1324 1/2, a couple better on the day. Funds leaving meal has been a drag on soy. Good volume in rice at these prices, 1661 1/2, off 7 1/2. The bear isn't getting paid as well for the push. Dow pressing recent lows, 32,854, off 278 more for a tough equity week to the midpoint while bonds slip 12 tics, 126.18.
Tuesday soy gives back more than 1/2 of Monday gain. Some talk of soy gaining acres from wheat losses and really a quiet export market. 1322 1/2, off 18 3/4. Wheat up 16 from feedlot priced levels, 622 1/4. Corn gains another 6 1/2 to 577 1/2. Crop isn't even fully planted and the conversations have switched to dry weather as well as some prevent plant up north. Rice down another 14 1/2 to 1669 and we have some interesting options activity in the June puts with only a few days to expiration. Looks to be some form of trap being set between 1660 and $17. Dow off 228 points, 33,132 but really just more of the same churn that wall street mostly has become. This Tuesday close only a measly 72 points better than last Tuesday with a ton of noise in the middle. Bonds up 5 tics. 126.30.
Bulls got a bounce Monday in the grain room with some dryness in the extended forecast and planting nearing completion in lots of growing areas. Far north is still behind. Options action is starting to rotate from a put bias to a summer call bias. Beans up 34, holding and adding to early gains. 1341 1/4. Corn good for 16 1/2 to the upside, 571. Wheat stumbled but still managed to close 1 1/4 better, 606 1/4. Rice bear keeping pressure on weak longs, 1683 1/2, off another 23 cents. Been a bloody run for the bulls. Dow off 136 in a really dull consolidation type trade, 33,360 while bonds leak 12 tics, 126.25.
Friday opened with an early bounce that couldn't hold and we leaked lower across the grain floor. Beans down 26 to end the day at 1307 1/4. That's a pretty impressive fall from grace. Meal soft and below my support. Commitments had the funds adding 18K to meal longs last week while I had expected it to be down at least 20K, so I missed that read. Helps to explain the late week meal weakness. Wheat down to 605 3/4, off 6 3/4 while corn holds 554 1/2, off only 3/4 cent. Rice down 27 to 1706 1/2 and commitments shows that mostly those looking to trap old crop shorts are getting trapped. If you don't know the mark at the table, its you. Dow off 112 points giving back part of wed/Thurs rally, 33,496 and bonds off another 24 tics, 127.05. Planting pressure should mostly be wound down by Monday close and next week will be debt ceiling talk all week.
Thursday morning exports brought nothing friendly to the dance and allowed corn and soy to tic my first bigger areas of support in new crop. I have to admit timing is not even close to what I had pegged but I can reconcile the move. It gets harder for the big fund seller from here on. 555 1/4 corn is off 6 1/4 in the front but Dec probed the 490 area and recovered over 5 bucks and higher on the day. Beans closed 1333 1/4, off 3 3/4 which wasn't bad with the meal hit. Wheat continues the drain, 611 3/4, off 13 3/4 while rice dips to 1733 1/2, down 17 1/2. Dow churned as usual, 33,618, up 140 points on the close and bonds leaked another 28 tics, 127.29.
Ag slide continues with the Russia corridor extended and China corn cancellations. July corn hit for another 19 3/4 to 561 1/2 with December off 6 cents 499. My calculator gets a lot harder for the funds to push new crop below 490. I remind everyone again its a long growing season and this weekend should provide the last of the sell what I got planted mentality. After that we shift to oh my god can I grow what I sold. Wheat off 22 to 625 1/2. Beans off 27 cents, 1337 as river freight is so low we know exports are slow. Meal still showing some promise and I struggle to get meal much below 415-420 with Argy low of supply moving forward. Rice pops a dime as 1740 area found trade, 1751 close. Dow in an up churn day recovering all Tuesday drop, 33,478, plus 418 points and bonds leak 11 tics, 128.25. Probably too low to sell and too high to buy.