Friday had more china talk and sales, with everything just wanting to be stable in front of weekend weather and business opportunities. Corn up 2 3/4 to 333. Beans gain 4 to 892 1/4. Wheat stable at 534 3/4, off 1/2. Rice gains 3 1/2 to close 1182 1/2, but up against a bigger seller. Dow off 33 points, 26,520 and bonds drop 16 tics, 179.23.
Thursday trade show china is playing, and playing in places they haven't for a while, like solid numbers of corn and wheat. Funds have discovered they can use the GFS weather reports daily to churn the markets, so get use to it and expect it. Corn up 4 with China buying the main story to me, 330 1/4. Beans gain 7 1/2 to 888 1/4 and again China stories and real demand the reason. River basis is solid and climbing. Wheat drops 15 1/2 to 535 1/4 as the weak leg and a weak contract. A couple hundred Sept rice puts traded quietly as the purposely designed lack of transparency allows someone to get a million bushels of crop covered invisibly. Rice futures break 20 to 1179. Yo-Yo financials and bonds get back a half a point, 16 tics, 180.07 and Dow drops 212 points to 26,553.
Wheat the feature again Wednesday as weather concerns abroad and rain we really don't need at harvest are putting a bid in one of the worst contracts for a bull at the exchange. 24 higher, 550 3/4. Funds tried to keep corn down but we still closed 1/4 higher, 326 1/4. Beans gained 6 1/2 to 880 3/4. Rice was off a couple, 1199, as we wait for harvest and east side delivers the rest of July to a stubborn long. Dow rocks the top side for 274 more to 26,765, but that's 300 off the highs. Bonds give up 18 tics, 179.23.
Big new sale of corn to China gives us a bid early Tuesday but funds kept their thumb on the market thru the day and as expected, brought selling late to mark the close. China is trading us brilliantly, letting the uneasiness of a busted trade deal keep prices low so they can buy us out for a song. Our big carry over is a blip on the map of their demand needs. Weather is a non event and the calendar works against the farmer. Contracts are written that way and the money boys know it. 326 close is 2 3/4 lower. I am wary that the funds could sell another 200K of contracts but it is also clear that they are hoping to heard out the longs to do the selling for them. Most of the volume was in the 329-330 range, so that is were we should see defending. For the next several days, pay attention to where the volume trades, not the close, for entry and exit. Wheat gains a couple cents, 526 3/4, and beans up 2 3/4 to 874 1/4. Rice bounces 4 1/2 to 1201 as July goes off with 250 outstanding. Randy delivered 87 new receipts out of Waldenburg and Diaz. Be interesting to see where the rest comes from or if it gets swept under the carpet. Dow busts out to the topside for 523 points, 26,491, while bonds rally 21 tics as well, 180.09.
Soft Monday with better weather over the weekend. Corn off 8 1/2 to 328 3/4. Beans follow $8 weaker meal all day and close off 14 cents, 871 1/2. Wheat gives back Fridays rally, 524 3/4, down 9 1/4. Rice up 2 1/2 to 11196 1/2 as harvest gets moving down in LA. Today is last trading for July futures and 250 rice still open, so should see some fireworks or a blatant off exchange deal. We will know in a few hours. Dow strong all day but fades to 25,968, off 9. Bonds down 6 tics, 179.20.
Friday WASDE numbers came in about as friendly as you could ask for across the board, but as I have been saying internally, corn especially is a weather market. 2.6 carryover in corn is a big number still. Midday weather forecasts took an abrupt swing to more rain and less heat, and that was the primary driver in corn demise. 337 1/4, off 11 1/2. Beans off 9 3/4 to 885 1/2, but that was with the funds back selling meal off $5. Not a bad showing in beans, all for all. 534 wheat was up 9 and that is more global weather concerns, so this game may not be over just yet. 1194 rice was off 16 and pressured all day. Report at 25 carry over was less bearish than I expected. Bearish, but less bearish. Dow yo-yo up 406 to 25,977 and bonds off 18 tics, 179.26.
Wheat trade Wednesday was up 21 1/4 on the day, 516 1/2. The reason I lead with wheat isn't because I like the contract, I don't, but because of why I think it rallied. Funds got comfortable shorting again and I believe the fear was induced from international causes, EU and black sea reasons. Shorter crop potentials and hotter drier conditions. Where they grow wheat they grow corn. At the same time on the calendar as us. I obviously want to be done for old crop corn inventory up here, and want to be selling some new crop. Nothing changes my opinion that corn will be the weakest of our three legs of grain. Funds have covered about 1/2 of their corn shorts and some are long. But this exemplifies why I have been pushing primarily the put strategy which gives us a floor while having some upside room to run for higher cash sales. Again, it is client and location specific. In the delta I expect basis gains for what we store to cover options costs, not the case in Illinois. Lets use Thursdays rally to get some more corn puts bought, and pray they go off worthless. Beans off 5 3/4 Wednesday but not any hurries to sell, 890 3/4. Rice off 20 1/2 as the bull didn't defend, 1210. Bonds off 2 tics, 178.30, and Dow up 199 to 25,969.
A bit of a Monday-Tuesday type trade as we give back 3 cents in corn, 343 1/2, and drop 2 1/2 in beans to 896 1/2. Meal was soft and that concerns me for a couple reasons. Wheat up a couple to 495 1/4. Rice fund bull came to defend today for a 10 1/2 cent rally, 1230 1/2, but ran into more cash selling near the highs. I can assure you it will be harder for the funds to overwhelm to the upside this year than last, Maybe for a short time, but it will be a small window with very little opportunity for them to escape. In fact, it might already be closing. Dow off 409 to 25,770 as expected, and when it gets this easy to spot, expect a significant change in pattern, and soon. Bonds up a point and a tic to 179 even.
Quiet holiday allows for some decent Ag gains Monday. Corn up 3 to 346 1/2 as test of 350 couldn't hold. Beans up 9 and knocking on the buck, 899. Wheat even closed 1 1/4 higher, 493 1/4. Rice off 11 as the bull took a day off from defending, 1220. We have another WASDE report on Friday, and I expect it not to be as bullish as some think. I expect a bearish rice number to print. Dow up 420 to test the top of the recent range, 26,179, but bonds only off 10 tics, 177.31.
Shortened hours Thursday leading us into the holiday weekend. Export sales have something for a bull if he wanted to look, but selling pressure thru the day pushed corn down 7 to 343 1/2. Long weekend of weather risk, but also political risk, so I think some took the quick money rally and put a little cash in the pocket. It is an order flow market. Beans held much more firm, 890, only giving back 1 1/4. 492 wheat is off 6 3/4. Rice buyer kept the market fairly solid, 1231, off 3 1/2. July squeeze better happen soon, and OI doesn't have a big number. Make no mistake, the funny money boys could print a silly number late in the game, but its for display purposes only. Dow closes 25,759, up 184, but 300 points off the highs. If its a quiet weekend those highs will get taken out. Bonds up 5 tics, 178.09.
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