First intentions trade on Wednesday kept things muted with corn off 6 to 480 3/4 and beans off another 5 3/4 cents, 1386 3/4. Sept rice getting squeezed, 1670 1/2, up 16 but Nov only a penny higher, 1669. Huge Nov volume for not huge pay. We will be switching to Nov moving forward as we are down to 400 total open interest in Sept. I do expect deliveries next week to take the pressure off Sept. Wheat bounced 7 to 576 3/4 but 1000 deliveries and full carry spreads are a drag. Will be moving to Dec from here on in wheat. Bonds hold Tuesday rally in a pretty tight trade, 121.04, plus a tic while Dow holds its rally as well, 34,956, up 69.
Tuesday grain room action was muted. Beans gave back 13 1/4 to 1392 1/2. Corn lost all of Monday gains, 486 3/4, off 9 1/2. Wheat sees new lows, 569 3/4, off 18 1/4. Fund buying in the rice is the lone star, 1654 1/2, plus 46 1/2. Financial room looser with the money as we bounce 293 points, 34,887 and bonds gain a full point and 5 tics, 121.03.
Strong grain room trade Monday on a shrinking bean crop with some more heat next week and not a lot of rain in the finishing forecast. Beans gain 18 to 1405 3/4. Corn up 8 1/4 cents, 496 1/4 as well. Corn was clearly short covering to me and soy is adding to a long. Wheat with its variable rate storage penalty still a drag, 588, off 5 1/4. Maybe its time to reevaluate what can be delivered in wheat instead of how much can we charge. When a crop doesn't clear, something isn't right. Dow up 217 points, 34,594 to recover last weeks churn and bonds pick up 6 tics, 119.30.
Options expiration Friday made sure rice stayed above 1560 to settle the calls in and the puts out of the money. 1568, off 3 1/2 and open interest over 10K. No reason to be in Sept any more. Corn and beans didn't really have any pin issues, but soy has a solid bid on drier weather than we would prefer to finish out the crop. Beans 16 higher, 1387 3/4 but corn ended off 1/4 to 488, held back by wheat which dropped 10 3/4 cents, 593 1/4. Jackson hole is here so sell the rumor, buy the fact financial trade and we bounce 237 points, 34,377 while bonds languish, 119.24, off 3 tics.
Exports give us nothing Thursday morning But we have still another day of heat and dry forecasts for pod filling to help the beans. Meal bid strong and soy gains 11 1/4 on the day, If you are late to the dance, here is another chance to get some production sold. 1371 3/4. Rice 1560 options are getting milked for all they are worth as we pop 27 1/2 cents, 1571 1/2. In rice defense, the bigger world picture is quite friendly, we just have this pesky harvest to get thru. Crop tour still showing decent corn yields and we fade 2 1/4 to 488 1/4. Wheat gives back 8 1/2 cents, 604 close. Dow was 200 higher and looking like something was going to come out of Jackson Hole, but rolled over to 34,140, off 382 points, while the bonds slip 12 and back below 120s to 119.27.
Heat is on/risk is on for Wednesday trade. Dow raises its head 178 points, 34,522 and bonds rally a point and 28 tics, 120.07. Markets just tired of going down for now to me but there is a possibility with Jackson Hole that something got leaked. Meal bid again and soy up 14 1/2 to 1360 1/2. Corn gets a solid 11 cent bounce, 490 1/2 and wheat up 10 3/4 to 612 1/2. Dec river freight still has a 4 handle and I would bet that the bulk of what China does buy will ship Pacific NW. That's what the river is telling me and that is not enough to fix basis. This is shaping up to be one of those years where the farmer that has to sell off the combine could get really hosed, both flat price and basis. Don't allow yourself to be in that situation. Rice off another nickel, 1544 with mostly spread roll again.
Tuesday trade had soy open OK but faded thru the day with bean oil especially soft. Crop tours showing better than some expected and it really grabs me how much the Sept/Nov bean spread has collapsed these last 20 days. 1346 close was a 15 3/4 cent loser for beans. Corn off 3 to 479 1/2 and wheat gained 2 1/2 to 601 3/4. Rice spread roll the feature again and we leak 2 1/2 cents, 1549. Looks like the 1560 options are getting delta up pretty well. Dow wanted a bid but couldn't in front of Jackson hole, 34,344 and off 180 points on the day while bonds get back 15 tics, 118.11. My work has the Dow a bit oversold front-running a non fed meeting get together. It will be interesting to see what glue they use to hold the economy together next.
Monday trade opened with a weather story heat bid but Faded and really didn't impress me much at all. Soy held the best, 1361 3/4, plus 8 1/2 but off nearly 20 from the early highs. Corn traded 506 but a 482 1/2 close, 10 1/2 lower on the day was ugly. Corn better find a Tuesday bid. Wheat drops 14 to 599 1/4. Rice off 3 cents, 1551 1/2 as options strikes have us bound up and the spread roll continues. Dow had a 400 point up and down range, 34,524 close, off 41 points. Bonds down again 117.28, minus a point and 11 tics. 160s really wasn't that long ago, over $40,000 per bond. That's what duration does to value.
Friday trade fueled by the extended forecasts for big heat and little moisture in the mid west. After the close commitments confirmed that the week previous had significant fund selling, and those loser positions being cleaned up for the end of the week probably played a role as well. 493 corn settle was 7 1/4 better, but on a small declining open interest. Wheat gained 26 3/4 to 613 1/4 but OI slipped there as well. Soybeans and products end the week firm. Nov beans up 23 1/4 to 1353 1/4, nearly a 50 cent pop from Tuesday close. More spread roll in rice as we are down to 4800 Sept, 1554 1/2, up a penny but declining OI there as well. Churn Dow trade, 34,565, plus 29 points and bonds pick up 18 tics. 119.07.
Thursday morning exports OK in soy but no real surprises. Next week is going to be hot and dry for the mid-west and that's really the fuel for this bump. 1330 beans settle 6 1/2 better on the day. Corn up 4 1/4 to 485 3/4. The 475-480 area wants to provide value, maybe until the combines get rolling. 589 1/2 wheat is off 8 1/4 and my only real explanation is fund selling and fear of global recession. More rice spread roll and 1 1/2 lower close, 1553 1/2. I expect a significant uptick in exports to Latin America, but until the sales get posted we have to assume the buyers are waiting on the combines to hit Arkansas and hoping for a bunch of farmer green sales. Bonds trade to new lows, again, and settle off another 23 tics, 118.21. Dow off 285 points, 34,536. Last Friday we were 800 points better so the churn factor in this trade is definitely weaker. If you want to try to catch this knife, I'd make sure you have a trusty stop in place.