Another nothing weekend gives the financials room to breathe Monday with the Dow up 85 points, 34,763 and bonds gaining 4 tics, 126.18. Russia is shutting off the corridor, but we got a buy the rumor sell the fact trade with Sept corn slipping 7 1/4 cents, 499 1/4 and wheat off 7 3/4 to 653 3/4. Both just taking a breather after the recovery from WASDE drop on the 12th. Beans up 7 1/2 to 1407 1/4 but on the back of strong meal. Computer went after some of the trend following funds in rice and pushed us down to 15 bucks but a solid bounce back to 1536 1/2 at the close, off 12.
Friday grain room bid with some of the rains disappointing and globally there are some pretty significant weather issues as well. Corn up 13 to 506 1/2 and wheat gains 21 3/4 to 661 1/2. Short covering and the Russia corridor are probably the biggest drivers for both. Soy taking a rest, 1399 3/4, plus 3/4 with $14 attracting some pricing I'm sure. July rice went off weak with only 17 contracts to fulfill but Sept continued the rally, 1548 1/2, plus 24. Dow up 88 points in an uneventful trade, 34,678 and bonds slip 18 tics, 126.14.
Thursday exports nothing unexpected but market as a whole just doesn't believe the USDA. I mean really doesn't believe and to heck with the computer models don't believe. We opened firm and just kept pulling. India potentially halting rice exports and also now talk of dropping wheat import tariffs gaining traction. Most people outside of my crowd don't really follow India as closely as they should, and this year could be that wake-up call. South America crops are done getting bigger and starting to have some downward talk. Basis is probably done widening from us to them as well. Sept corn up 17 1/4 to 493 1/2 with dec back to $5 and July a buck over sept here at expiration. Beans pop 43 1/2 to 1524 1/2 aided by a meal bid while wheat lags, 639 3/4, up only 7. Most know I don't like the wheat contract, but I can't for the life of me see why you would want the risk of a short position there with what is going on all around right now. Rice gains 43 1/2 on the India news and a computer that got caught pushing down at the wrong time. 1524 1/2. Given rice stocks, $15 is not some silly high number. If India and Thailand continue their current path, it could be cheap. Bonds rallied another point and 7 tics to 127 even and the Dow took the day off, 34,590, up 40.
WASDE Wednesday disappoints in carry over numbers for corn and beans. Markets reacted negatively as expected out of fear of computers but I don't know a soul who believes this will be the real numbers at the end of harvest. Corn off 18 1/4 to 476 1/4 and Dec down to 483. Wheat hit for 27 3/4 cents, 632 3/4 but that was a sympathy break. Beans off 29 1/2 to 1355 3/4. Big question of if we reset to new lower prices or not, but we certainly will have trade-able ranges moving forward with the carry over buffers in place for the next month. 1481 rice is 3 1/2 higher on the day after looking below 1460 early. Nothing really bearish to the rice to me. Bonds rally a point and 13 tics, 125.25 and the Dow picks up another 86 points, 34,550. Inflation is slowing and that is potentially allowing the FED to take their foot off the gas. I don't trust the Fed to be practical.
Tuesday just settling into positions pre report. Dec corn stuck around $5 and Sept up 2 1/4 to 494 1/2. Wheat stronger on Russian drones hitting Crimea, 660 1/2, plus 14 1/4. Beans up 19 1/2 to 1385 1/4. Meal finding its feet. Rice down another 12 cents, 1477 1/2 as the computer is trying to get long funds to puke. Dow up 318 points, 34,464 with what is really a path of least resistance trade and bonds gain another 10 tics, 124.12.
Nothing severe over the weekend allowed for a relief rally in the financials with the Dow gaining 209 points, 34,146 and bonds up 10 tics, 124.02. Corn bounced a nickel to 492 1/4 and Dec is hovering around 5 bucks running into the WASDE report on Wednesday. Wheat slipped 3 1/4 to 646 1/4 while beans popped 27 cents, 1365 3/4. I think corn and beans are trying to get fairly priced going into what could be one of the more volatile WASDE reports of the year. Rice off 10 1/2 to 1489 1/2 with the computer trying to push the chart down enough to get fund longs selling. July strong and looking for cash.
Friday trade looking a a mild weekend with favorable rain forecasts and a weaker trade thru the day. Corn ends off 11 3/4 to 487 and Dec back under $5. Wheat off 8 1/2 cents, 649 1/2 and beans drop 19 1/2 to 1338 3/4. Sept rice down 14 to 1500 and July still has the squeeze setup. Dow down 194 points, 33,937 and bonds slip 9 tics to 123.24 in a risk off trade everywhere.
Money flow computers or just churn systems pushing the weak up and the strong down Thursday. Corn gains 13 3/4 to 499 and Dec up to 506. Wheat hit for 16 1/4 cents, 658. Beans drop 20 to 1358 1/4. Rice up a dozen, 1514 and July is bid and thin. Dow hit for 378 points, 34,131 and bonds off another point and 7 tics, 124.01 with global and Fed bankers still talking about having to be more aggressive on inflation, even though it appears at least in Germany but really throughout much of Europe inflation is projected to fall back below 2%.
Wednesday trade lead in the grain room by wheat with Russia concerns that I believe are real, with Sept up 32 1/2 cents, 674 1/4. I think one of the factors that will affect corn usage this year is we are potentially taking feed wheat off the table, at least in the US. Sept corn off 2 3/4 to 485 1/4 with DEC unchanged. Another factor yet to unwind is ethanol usage which most expect to be unchanged to lower and I will argue that E 15 will take demand up, potentially measurably if crude is basing. Chop day in beans, 1378 1/4, plus 3/4. Rice took a 50 cent up round trip but settles 4 1/2 higher, 1502. July had to look up 1850 to find a seller. Fed is making more clearly known that they will raise in July and bonds responds off a point and 12 tics, 125.08 while the Dow leaks 128 points, 34,509.
No one wanted to trade Monday and it showed. Surprised at the early strength with the amount of rain the country got. Moving to September for the grains as July is well into deliveries. Sept corn off 1/2 cent but a dime off highs. 488 with a nickel carry to Dec. Still a good showing to me. 121 Deliveries came out from Cargill after the close so we will see how the new receipts find their new owners. 641 3/4 Sept wheat off 9 1/4. Beans continued the strength that sub 84 Mil acres will provide, 1377 1/2 in Sept, plus 22. Sept had traded as high as 1412 and July set a new high early, 1616 but faded to 1562. Still no deliveries in beans or meal, but meal just cant seem to get anything going. Its early for meal demand but with Argy problems I wouldn't get too complacent that meal will stay the weaker leg of the crush much longer. 43 rice came out and most of the earlier delivered got cancelled, only 59 left outstanding. CBOT July short still needs to source a million Bu. Weather cancelled rice goes to the river or domestic mill, we are pretty much out of old crop rice so the early harvest rice might have a small window of extra premiums to refill pipelines. Dow took a day nap, 34,637, minus 6 points and the bonds looked higher but couldn't make it stick, fading back to 9 lower at the end, 126.20. Happy fourth!
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