Exports Thursday morning had nothing unexpected, but we are risk on across the asset classes and drought is the word of the day. Beans pop 40 cents, 1428 1/4 and stronger in new crop. Wheat rips to 661 1/2, that's 31 1/4 better. Corn along for a 15 1/2 cent ride, 623 1/4. Rice stuck a bit tighter, 1774, plus 11 1/2. Dow gets new money as we pop 440 points, 34,724 and bonds gain 25 tics, 127.25.
Wednesday trade a bit of a give back day. Wheat off 6 to 630 1/4 while corn slips 4 3/4 to 607 3/4. Beans lose 11 in mostly spread roll related trade with the pain in the front end, 1388 1/4. Nothing much expected for exports tomorrow. Rice hit for another 84 cents, 1762 1/2. Over 2 bucks in 2 days, but seemed to find at least some buying near $8 cash. Fed paused as expected but the Dow had run up going into the statement so the easiest path is down. 34,284, minus 247 and that was with a couple hundred point bounce off the lows. Bonds up 24 tics, 127 even.
Beans bring the strength Tuesday with one of the forecasters looking at a smaller soy acreage and softer yield. I wouldn't argue that side of the balance sheet, I'm more concerned with the consumption side. 1399 1/4, up 26 1/2 on the day. Wheat chopped up and down but settled up 2 1/2 cents, 636 1/4. Corn gave back 4 3/4 of Monday rally, 612 1/2. Rice flushed the last of its speck shorts and then tanked to limit down, 1846 1/2, off a buck 20. Going to be ugly for the funds again I would guess. Dow up 142 points in a general churn day, 34,531 and bonds off 28 tics, 126.08.
Dry conditions fuel a Monday rally in corn to 617 1/4, plus 13 on the day. Wheat up only 3 1/2 to 633 3/4. Wheat for feed has a ceiling effect on corn and its really all dependent on how Russia keeps exporting and at what prices. We could see an entirely different scenario after July 18 when Russia has a line drawn on the Ukraine, but that's a ways off and gets us well into the Brazil corn harvest/selling period. Beans fade 13 3/4 after Friday strong close, 1372 3/4. July rice squeeze still on, 1966 1/2, plus 64. Sept is flat so those trying to pick the top of the spread have gotten slaughtered. Switching to Sept moving forward in the financials, Dow gains 187 points, 34,389 and bonds leak 12 tics, 127.04.
WASDE Friday morning didn't bring anything of note to me in corn and it gave back Thursday strength, 604 1/4, minus 6 cents. I differ from their balance sheet up and down so time will have to sort that out. We are in a weather market and rain will be the most important estimate for a bit of time. Wheat up 4 to 630 1/4 and in a bit of no mans land here. Beans power up 24 1/2 to 1386 1/4 but really biting into crush margins so that makes me a bit nervous, No surprises to me that would drive on the report so this I'll attribute to order flow. Rice July short squeeze continues as flat shorts and bear spreaders alike are getting hammered. 1902 1/2, plus 24 1/2. Commitments doesn't have anyone too far out of line so I still don't think its an arena that many farmers need to be in. Dow up 44 to end the week 33,909 and bonds leak 4 tics, 127.11. I will be switching to Sept for the financials from Monday on.
Export sales nothing to write about Thursday morning but market clean up in front of WASDE gives us a bid as most funds are short. Corn up 6 to 610 1/4. Wheat gains 9 1/2 cents, 626 1/4. Beans seem to be tired up here even with bio-based oil bid, 2 1/2 better soy, 1363 1/4. July rice lit it up for another 47 to 1876 and open interest only dropped 18 on 700 volume. I think we just introduced some fresh meat to the grinder. Dow up 156 points, 33,865 and bonds recover yesterday, 127.15, plus a point and 5 tics. You should be out of any June bonds.
Wednesday trade mostly driven by evening up in front of Friday WASDE. Expected rains weighed on new crop. Corn off 3 3/4 to 604 1/4. New crop softer. Wheat slipped 11 cents, 616 3/4. Beans got a 7 1/2 cent bounce, 1360 3/4 with spot meal catching a bid. Rice squeeze continues, 1831, plus 18 1/2. Dow in a tight churn range trade, 33,709, plus 92 points while bonds faded with what is expected to be the last rate hike in July making the rounds, 126.10, off a point and 13 tics.
Corn rejected the break Monday and gained 10 1/2 cents to close Tuesday out at 608. Still not comfortable holding old crop from here. Sometimes it's time to put a trade to bed. Cash or futures. Wheat opened strong on more Russia escalation but faded 20 cents from highs to only 3 3/4 better by the end of the day, 627 3/4. Beans up 3 1/4 cents, 1353 1/4. Rice bull looks up $18 and holds, 1812 1/2 at the end, plus 19. I don't see the benefit in waiting anymore in old crop rice either. Bonds up a tic, 127.23 and the Dow churned lower most of the day in a tight range, recovering to 33,617, off only 2 points. Obviously, you shouldn't be in June bonds moving forward as liquidity is fading fast.
World didn't melt down over the weekend but still waiting on rain to materialize. Wheat gained a nickel, 624, while July corn slipped 11 1/2 cents, 597 1/2 as we struggle around 6 bucks old crop and local basis takes care of the rest. Beans off 2 1/2 to 1350. Rice squeeze continues up front, 1793 1/2, up 24 1/2. Dow set back 198 points from Fridays outsized gains in a back and fill type trade, 33,619. Bonds unchanged, 127.22.
Money flow into pretty much anything funds could buy Friday. We could see the Dow basing but I didn't expect 714 more points to end the week, 33,817. I was sure the debt ceiling was noise, but as we trade thinner and thinner, it's easier to exaggerate moves. Keep that in mind all summer in all trades. Bonds leaked 29 tics, 127.22. Corn up 16 1/2 to 609. Corn commitments had funds buying back 47,000 contracts last week by Tuesday close and based on trade thru Friday all but the stubborn have probably lost the will to be short corn, at least for the weekend. Wheat limped along, 619, up 8 1/4. The big, short position there is considerably less transient. Beans gained 23 cents, 1352 1/2. Soy outpaced crush as meal gave up $3.60. Meal fund long continues to shrink its position, but I don't see them ever wanting short in this global setup, so shrinkage is a good thing to longer term base building. Rice rallied to $8 a Bu and backed up to 1769, still 21 higher. Fund short got played like a fiddle again. Whole grain market structure seemed to overdo the rally Friday just like we overdid the break Tuesday.
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