Wednesday trade a build up to the 50 come 75 basis hike by the Fed. We got the 75 on cue, and the market reacted with a buy the fact trade,30,651, plus 296 points in an 800 point range day. Bonds gained back a point and 2 tics as well, 132.13. Of course the market ignored that Chair Powell basically said he would put the US and by default world economy into a depression if he has to use only the tools at his disposal to curtail inflation got overlooked. He also stated that he will be using the two primary tools he has, raising interest rates and tightening liquid money in the system until we get back to 2% real inflation. The beating will continue until moral improves. Grains were pretty much a dull day by comparison, with bullish global grain issues weighted against global depression. Wheat in another churn, off 1/4 cent, 1050. Corn gains 5 3/4 to 774 with a strong cash market. Beans off 4 3/4 to 1693 3/4 but meal is stronger than I expected and gives soy a base to work higher from. Rice did give back a dime, 1645 1/2 with more orderly spread roll. Bear wants it lower, but he needs you to sell it.
Tuesday a bit of a catch your breath day in the financials as we went from maybe a 75 basis hike to already a for sure 75 basis hike. The Fed is more porous than my kitchen strainer. Dow off another 146 points to 30,355, and probably out of weak money to flush. Bonds off another point and 6 tics, 131.11. In the grain room, wheat got pushed the hardest, but nearing support in a big churning range, 1050 1/4, down 20 3/4 on the day. Beans off another 9 to 1698 1/2 but meal and oil are getting back to attractive prices for the buying side. Corn lower thru the day but only settles off a penny, 768 1/4. Rice bounce continues, 1655 1/2, plus 17 1/2 and again with spread roll and liquidation.
Global financial security/stability was at the forefront of Monday trade, with the September Dow off over 1000 and closing down 858 points, 30,501, and bonds losing 3 points and 3 tics to 132.17. So much for flight to quality. Fed is quietly, or not so quietly, floating a 75 point hike this Wednesday instead of a 1/2. There is only so much the FED can do without a governmental shift in policy. If governmental policy doesn't shift, the fed has to overreact. Markets recognize that, even if our elected officials don't. Soy the weakest player on Monday, off 38 to 1707 1/2. Meal and oil both weak and we had some flat price July liquidation. Country seems to still be bid. Corn closed off only 4 cents, 769 1/4, and wheat had a 40 cent up and down churn, settling up 1/4. Rice bounced up 13 from Fridays push down, 1638, and that was with more July roll and Liquidation.
Friday market really a build up to WASDE but getting beat up with global issues and another weak day in the Dow. Stocks crappy early, and not to disappoint, stayed crappy all day and closed 875 lower and on the lows, 31,388. Bonds had no flight to quality, and lost a point and 14 tics, 136.21. We will be switching commentary to Sept financial futures from Monday on. Really an all around punt of WASDE. Corn knocked both sides of the range but settles 1/4 higher, 773 1/4. Wheat has a 28 cent churn as well but another nothing close, 1070 3/4, off 1/2. Oil soft and beans fade lower to give back 23 1/2 to end 1745 1/2 after one heck of a strong week, given I expected a bit of a set back, not a bounce. Rice off 38 1/2 to 1625 in a textbook liquidation trade where it appears that the funds puked their longs into well played commercial hands. 1300 July traded and 1050 of liquidation. That is a ratio almost never seen. Congratulations goes out to the commercial that milked that cow.
Thursday exports nothing to get excited about, but firm cash markets had beans up 29 more to 1769 with firm meal and corn gaining 8 1/2 to 773. Corn closed nearly a dime off the highs though and Beans had backed up a fair bit as well. Wheat in a chop range lower but couldn't stay much lower, 1071 1/4 close, off 3 1/2. Rice roll finally got some wheels and the long rolled part but flat sold a big piece, pushing us 28 1/2 lower, more than erasing all of Monday outsized gains. 1663 1/2. Scary story to me is financials with the churn trade losing out the flat liquidation in the Dow, off 626 on the day and looking to me for a bit like it could get bloody, 32,263, and bonds stalled out, up only 3 tics, 138.03, as flight to quality never materialized, when it probably should have.
Wednesday trade has some more follow-thru buying in the beans, lead this time by oil, 1740, plus 11 3/4. Wheat had a churn day but really struggled to push lower and ultimately closed 3 higher, 1074 3/4. Turkey meeting was a bunch of nothing. Rice bear kept a lid and we do have spread roll and small position squaring, 1692, off 2. Surprised at the lack of volume. Corn up 7 1/2 to 764 1/2 with strong cash bids. Dow gave back yesterday gains in yet another computer churn, 32,889, off 276, and bonds gave up a full point to 138 even.
Wheat and rice both weaker Tuesday and giving back part of Monday gains, with wheat off 21 1/4 to 1071 3/4 and rice down 29 cents, 1694. Both seemed to be finding buyers as the day went on and the seller didn't want to dig deeper into his pocket for any more push. Meal found a bid and up $10 in the front, which is impressive given that we are at fund rolling days, so beans had an easier path up, 1728 1/4, plus 29. Corn strong as well, 757, up 14 1/2 and that was with declining open interest from the roll. Cash is strong in the country and China is supposedly buying grain for their Wuhan Covid reopen. Dow up 253 in another general churn day, 33,165, and bonds gain back a point and 9 tics, 139 even.
Monday strong in the grain room, led by wheat, with Russia bombing grain terminals and Kiev. This reduces any possibility of a deal getting cut in Turkey on 6/8. Wheat neared limit and closed 53 higher, 1093. Corn 15 1.2 higher as well, 742 1/2, and that was with good planting progress. Rice up 43 1/2 to 1723 with the bear not willing to defend on the day, but the Club will be meeting in California this week, so don't get too friendly yet. Beans stalled for now, 1699 1/4, plus 1 1/2 and no real features in the products. Dow was 300 higher but closes only up 24 points, 32, 912, and bonds drop a point and 15 tics, 137.23.
Friday was a liquidation or clean the books day headed into the weekend with talk that things were going to be rosy in the Ukraine. Truthfully, market is just looking for new news. Bulls need fed regularly and computers love to push down as much as up. With these prices, grain buyers have gone hand to mouth and smaller quantities. Beans gave back most of Thursday's rally to 1697 3/4, off 31 1/2. Meal down to 408. Wheat off 18 1/4 to 1040 and corn fades to close 727, off 3 1/4. Oats got a 37 cent pop up to 690, but that was July only and doubtful it will stick. Dow was a bit of a dog as no one wanted to add to Thursday's rally there, 32,888, off 335 points, and bonds slipped 18 tics, 139.06.
After the last two down hard days in corn, Thursday we just dogged around for a penny loss, 730 1/4. No one wants to push down from here. Computer hoping for another weak long and one hasn't showed up. Wheat bounced 17 cents and was stronger earlier, 1058 1/4. Bean oil lead the way and beans popped for 39 to 1729 1/4, basically resetting to Fridays close. At least the computers made money. Rice off 16 to 1697 1/2 and the seller is hoping that someone gets into stops. Spread roll is going smoothly so far, and at better prices than expected. Open interest isn't dropping as fast as one would think either. Will repeat, watch the spread and open interest to see if we have a new player. I don't really expect one, but neither does anyone else. Dow had a big churn range and a strong close, 33,223, plus 425 points, while the bonds didn't do much of anything, 139 24, up 4 tics.
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