Thursday trade opens with soft export sales and more talk of wheat corridor shipments out of Ukraine. Problem with our exports is the strong dollar, and problem with the Ukraine export corridor is this little thing called a war. 795 wheat is off 15 3/4 on the day and below $8. The global wheat tightness has not been solved, so you have to consider that wheat might be the canary in the coalmine for other grains. I would argue that wheat is about the poorest written contract of all the grains, so it has always been the most susceptible to breaks, but we need to keep watch for if this is a contract issue, or just the easy low hanging fruit. No question that a bunch of fund open interest has left the building, so the real issue is when will they come back. Corn up a nickel, 605, and July corn went off nearly a buck higher than that. Aug beans off 13 at 1471 3/4. but July went off 1610. Another dead day in rice, 1640, minus 2 1/2. Dow rallies nearly 500 from the lows, 30,604, off 154 points, and bonds slip 25 tics, 139.18.
CPI at over 9% Wednesday morning way too high for the Fed to ignore at the end of this month and pretty much assures another 75 basis hike in short rates. Turkey brokering a deal to try to get grain moving out of Ukraine ports softened the wheat and corn later in the day. Corn did still close up 6 cents, 6 dollars even. Wheat gave up early gains to 810 3/4, off 3 1/2. Beans up 16 1/2 to 1484 3/4 on the back of strong meal. Rice had a totally dead day, 1642 1/2, down 2 1/2. Dow had a big range up and down but at the end of the day off 208 points, 30,758, while bonds gained a full point to 140.11.
Tuesday trade set up for the WASDE report and to me it was really a punt again. Every change could basically be a rounding error. Market was soft going in, digested the numbers, then went back to the downward push that depression can bring. Crude getting a punch in the face was a pretty clear marker of where the big money is headed. Beans down 53 3/4 to 1468 1/4, wheat off 42 1/2 to 814 1/4, and cor drops 43 cents, 594. That's an ugly grain room. If you step back and look at prices one week ago though, all we really got was one big round turn churn. Rice off only 8 1/2 lower, 1645, and receipts are starting to get cancelled as the industry has to use up the last of the easy access product. Dow leaked another 174 points, 30,966, and bonds close 20 tics higher, 139.11. Bonds looked over 140 again and faded over a point off the highs. Seems like the TV has everyone promoting bonds as a safe haven right now, so maybe bonds are done to the upside.
Monday trade firm out of the box with a strong overnight session going in, but faded thru the day and really gave us a bit of a soft close. Corn up 3 3/4 to 637, but that was 30 cents off the early high. Beans up 8 to 1522 but 30 off the high as well. Rice has a bidder that seems to be covering shorts, 1653 1/2, plus 8. He is very good at letting the market breathe and herding the sellers. All solid marks of AI in the smaller pools. Wheat slapped around for over 85 cents on the day and closes off 35 cents, 856 1/2. Dow off 170 in a tight day, 31,140, and bonds up a point and 28 tics, 138.23. 17 days to a firmly inverted yield curve and counting.
Strong day Friday in the grain room, lead by wheat, 891 1/2, up 55 cents. Corn in tow, 633 1/4, plus 24 1/4. Beans up 28 to 1513 1/4. Rice with a 7 cent gain as well, 1645 1/2. Bonds drop a point and 18 tics to 136.27 and the Dow trades a very tight range, giving back only 57 points of Thursday pop, 31,310. Financial room is trying to say things are settling down, but I trust that about as much as the latest politician. Lets try not to overthink this. We blew a few big funds out of grains and some of the faster turning short funds piled in. If anything is to be learned from recent trade, its that these markets don't have nearly as much depth as volume would make you think, and technicians still run the show. When we get prices that make sense, we need to take some off the table.
Thursday a strong day in the financials with the Dow solid, 31,367, plus 354 on the day. Bonds give back another point and 12 tics, 138.13. Still 15 full points too high to me. Beans up 38 3/4 to 1485 1/4 with solid gains in the products. Wheat picks up 32 cents, 836 1/2, and corn up 9 1/4 to 609. Rice in the show as well, 1638 1/2 for a 20 1/2 cent bounce. Rumors of china buying corn and Sorghum, as well as fishing the beans.
Wednesday trade a floor setting and clean up trade from the funds running out the door. Beans up 7 1/4 to 1446 1/2 with solid meal action again and oil the drag as crude equivalents get tougher to calculate out the curve. Did Buffett pick the top buying an oil company? Corn up 7 1/2 to 599 3/4. Rice closes 1618, up 7 after the sellers early push got him nowhere. Wheat off 2 1/2 in a big churn, little action day, 804 1/2. Bonds gave back a point and 12 tics, 139.25, and the Dow up 77 points, 31,013.
Tuesday trade after the holiday was a bloody mess as the world went risk off in commodities, fearing the deflationary pressures of a recession/depression. Bonds bumped a point and 26 tics to 141.05. That's a good 20 full points higher than I figure they should be with Powell on the short term rate throttle. Others are finally noticing and its getting some press. Dow off 125 after a late dress up, 30,936. Grain room ugly as beans get hit for 70 1/2 to 1439 1/4, corn down 27 1/2 to592 1/4 and wheat closes 807, minus 39. Funds selling longs, computers getting short. In rice we dropped 31 to 1611 with continual fund selling and what appears to be commercial short covering. We traded over 12 percent of the total open interest naked, and when that much moves, you better pay attention.
New month and end of week trade driving all the grains lower Friday, with beans off 50 3/4 to 1509 3/4. Meal and oil hit hard as well. Wheat drops another 38 to 846 and that just seems crazy given the big tender and trade out of Egypt. Rice closes 1642, down 32 1/2 and longs just giving up there as well. Corn drops 9 to 616 1/2. Good weather in the corn belt expected over the weekend. Dow looks lower early but gets a solid bounce to 31,061, up 280 points for the weekend window dressing. Bonds gain 23 tics, 139.11.
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