End of month trade Tuesday pretty ugly everywhere. Dow gets hit for 620 to close 34,457 and bonds gain a point and 22 tics, 163.22. Talk of how the new covid variant could severely affect global air travel, and the fuel demand that goes with it, at the same time the driving season is ending isn't very positive to oil consumption. Wheat gets hit for 35 cents, 787 1/4. Corn off 14 3/4 to 567 1/2. Beans down 24 1/4 to 1217 1/4 with weak oil. Rice off 26 cents, 1403 1/2. Liquidation trade in all the grains as open interest drops, and with the year winding down, I see no reason for open interest to want to grow between now and Christmas.
Monday was first intentions for Dec grain contracts, so in those we will be switching to march. March corn down 9 1/2 to 582 1/4, and surprisingly DEC stayed the firmer market. Spread can only get so tight in December, but the shorts would rather wait it appears. Beans down 11 1/4 to 1241 1/2, right on top of support and shaky, with weak products. Commitments tells an interesting story in soy. March wheat off 18 in step with the Dec and a carry spread as well, 822 1/4 close. Plenty of deliveries there. Rice up 1/2 cent in a churn day, 1429 1/2. Dow had a 500 point range and closed up 219 points, 35,077, to signal Europe that we are OK, but I'm not so sure. Bonds give back 28 tics, 162 even.
Day after thanksgiving and the world has a new covid variant to reconcile. Friday starts weak across the globe and the Dow is down over 1000 during the day, ending 34,858, off 891 points. Bonds rally 2 points, 28 tics, 162.28, in a flight to quality. With first intentions coming Monday and funds long the grains, liquidating trade pushed everything but corn down. Corn closed 7 higher, 586 3/4, but that was 20 off the lows and both sides were cleaning up Dec positions. 67K drop in open interest. I am surprised at the strength of the Dec/March spread so far. Beans lose 13 3/4 to 1252 3/4, and that's on a 12 cent bounce from the lows. Oil the weak link and OI down in both products. Wheat loses another 11 1/4 to 825 1/2, again with a 15 cent bounce from the lows. 27K drop in OI here. Rice off 17 to 1429 on declining OI as it appears that the professionals have churned the funds in rice again.
Wheat still strong Tuesday, up 10 1/4 to 856. Corn in tow and testing 580, closing 580 1/2, plus 3 3/4. Beans slipped 1 1/4 to 1273 as meal softens. Rice off 13 and the bull seems out of bullets. 1441 1/2. Dow picked up 195 points to 35,766, and bonds dropped 30 tics to 159.12. Holiday trade. Don't read too much into these next few days.
Thin holiday trade will be the feature all week, and Monday starts off strong, with the Dow and wheat rocking and everything else along for the ride. End of day had wheat hold its bounce best, 845 3/4, plus 22 3/4. Beans up 11 to 1274 1/4, Corn up 6 to 576 3/4, but neither really seemed to be willing to stand on their own. Rice off 2 cents, 1454 1/2 and it seemed uglier than that. Dow gave back almost all of a strong day, 35,571, only 22 better. Bonds lost a full point and a half to erase all of last weeks work, 160.10. Was hoping for a dull week, but seems like silly season is going to run harder, earlier.
Global and local domestic news putting some pressure on the financial side Friday with Austria locking the country down and fears that Germany might follow. Dow broke from a firm night trade to lower with a 500 point range and we closed off 262 points, 35,549. Could have been worse as several countries backpedaled or assured that no one else was going off the rails. Bonds gained 28 tics, 161.26. Bonds at 161 and hyperinflation are not compatible. I don't know what financial engineering is going on behind the scenes, but big money is not nearly as afraid of inflation as us lay people. Corn closes Friday 570/4, off 2 1/4, but still a dime higher than i thought the market could go. I expect next week to be difficult for the corn bulls. Wheat did gain 3 to 823. Beans off a couple to 1263 1/4 with oil soft and meal run seemingly tired as well. Rice loses 2 1/2 to close 1456 1/2.
Solid exports to start Thursday and grain bulls want to push, but I think farmer pricing and Dec deliveries approaching in corn and wheat play the upper hand going into a holiday trade next week. Corn ends the day 573, off 2 1/4. Beans give up 11 3/4 to 1265 1/4. Those breaks were on increasing open interest, so the bull is not getting paid for the extra money he is bringing to the table. Funds don't like that. Wheat off 2 1/4 cents, 820. Rice did pop 22 on increasing open interest, 1459. Move up from here will be harder on the bull I think. Dow off 56 points so no back and forth from Wednesday, 35,811. Bonds up 16 tics, 160.30.
Strong beans lead the grain room Wednesday, 1277, up 25 3/4. Inflation traders are bringing a bunch of spec money to the dance. Wheat up 12 to 822 1/4 but off the 835 high. Corn up 4 1/4 cents, 575 1/4 after rejecting 580 yet again. Rice pops 18 1/2 to 1437 with some cash bids out there enough to get farmer selling of 6.50 bin rice. Dow backs up 194 to 35,867 but nothing to really get an extension to the downside. Bonds pick up 14 tics, 160.14.
Tuesday a back and fill day in the grains as the buyers regroup and look for more feed for the bull. Corn off 5 1/2 to 571 with the DEC roll gaining speed. Wheat has a bit of the same roll issue fighting the bull there as well, 810 1/4, minus 16 on the day. Meal was weak and oil strong, but beans follow meal lower by 6 cents, 1251 1/4. Rice bull defends the close again with a positive mark of 3 1/2 cents, 1418 1/2. There better be some good export news Thursday, and we are past due for something positive. Dow churns for 52 points, 36,061, and bonds slip 8 tics, 160 even.
Meal continues strong Monday and beans pulled along for 13 cents, 1257 1/4. Wheat setting new highs, 826 1/4, up 9 1/4. Corn couldn't get anything going 576 1/2, off 3/4. Remember, we are only a couple weeks from what should be heavy deliveries on a DEC corn contract with a boatload of speculative long open interest. Screams toppy to me. Rice up 3 1/2 to 1415 on some late dressing of a big volume day. Dow off 4 tics in a dull one, 36,009, and bonds drop a point and 4 which pings my radar, 160.08. Some stories about liquidity issues for the 2 year roll.