Big news Wednesday is Powell comments that were interpreted as friendly by the street, although I'm guessing behind the scenes he told the bankers that he wasn't going to be as aggressive in his money supply tightening, which by the way I see it, is almost non existent anyway. Dow rockets up 742 points, 34,599. Bonds gain 10 tics to 127.10. Beans picked up a dime on another cargo of beans to china, 1469 1/2. Wheat got a solid 14 cent bounce from delivery lows, 795 1/2. Corn couldn't keep it rally going and deliveries didn't help, still 677, off 2 1/2. Rice dropped 8 1/2 to 1781 with a 1780 iceberg and now the behind the scenes 3 way shows up for a 50 lot. Sometimes with what is called legal today I feel like Ray Charles trying to judge Miss America.
First intentions trade in the Dec contracts led the volume Tuesday, but a pretty nothing event. We will be switching to March in the corn and wheat moving forward as spot has mostly been covered. March corn, 669 1/2, off 1 3/4 and we had 300 deliveries. Wheat got 1200 delivered as pretty much expected and we closed March wheat 3/4 higher, 781 1/2. ADM put out 500 oil which caught a few off guard and meal was a drag to soy, still 2 1/4 better at the close, 1459 1/2. Rice spread roll has started in a small way, 1789 1/2, off 3 1/2. Dow looked lower but recovered to 33,857, off 14 points in a nothing day of trade. Bonds gave up 22 tics, 126.23.
Dow off 485 points Monday on China unrest and a toppy market in general, 33,871, while bonds slip 6 tics, 127.13. The grain market had each piece behaving on its own. Wheat off another 18 3/4 to 756 3/4 as we approach first notice and the margin clerks force out the last of the longs. Funds are short in a very big fashion. Corn up 3/4 cent, 668 3/4. Beans got a 21 cent pop to 1457 1/4 with fund buying overwhelming China risks an what still looks like a solid Brazil crop. Rice broke 50 almost out of the gates but there was 100 of 1780 puts that allowed for 100 futures to be bought and that put in the floor with a bounce back to 1793 at the close, off 19. First Delivery intentions in the grain room for corn and wheat on Tuesday close, so clean up any Dec positions.
Post thanksgiving and short day trade Friday without a lot of news, but decent exports in corn, meal, and rice. Still way behind where I'd like to be though. Corn picked up 4 3/4 to 668 and rice gained 11 cents, 1812. The rice fund is still adding longs as open interest is up another 275 on the day, even with Dec options expiration. Corn and Wheat get big drops in open interest as their Dec options positions close out. Wheat had a friendly story out of DTN, which I mostly agree with, that bought buyers out of the gate, but the short funds saw no follow thru and hit wheat hard, 775 1/2, off 18 at the close. All the guys early that bought with a trailing stop got chewed up in a day. Beans up 1/4 at the close, 1436 1/4. Bonds off 1 tic, 127.19 and the Dow quietly up 145 points in a less than 200 point day, 34,356.
Pre-thanksgiving trade Wednesday mostly firm With Corn up 6 1/2 to 663 1/4 and wheat gaining a couple cents, 793 1/2. Beans picked up 6 1/4 to close 1436 and rice gained 6 1/2 with the fund system still pushing, 1801. Rice open interest continues to grow and we added 184 Sept to the open interest in a day, more than doubling the total and getting to a price were we need to pay attention. Dow up 85 points, 34,211 and bonds gained a full point, 127.20. Lofty bond pricing to me.
Financials got a pop Tuesday and someone is playing way out in the bond options looking for a decent sized rate drop in 2024. Dow up 391 with really lack of selling, 34,126, and bonds up a point and 5 tics, 126.20. Didn't really follow into the grain room with wheat continuing a slow leak lower, 791 1/2, off 7 3/4. Corn down 2 3/4 to 656 3/4. Cash around the country firm enough to make it hard to push down from here, but fund liquidation continues. Beans give back 7 of Mondays bounce, 1429 3/4. Rice fund buyer still in play 1794 1/2, up 13 1/2. Back up to where we get farmer selling.
Monday had nothing exciting over the weekend to feed it, and we mostly had a dull day. Corn saw liquidation with Dec deliveries just around the corner and funds don't like paying to roll a losing trade. 659 1/2, off 8 1/4. Wheat off 4 to 799 1/4, and we appear to still be too high compared to rest of the world, at least for now. We have a crappy start to our winter crop, but the rest of the world doesn't care, and we need to take what is happening to wheat to heart in our other grains if SA yields confirm after Christmas. Argy is still quite dry, so for us, that's a plus. Beans get an 8 1/2 cent pop on lack of farmer selling and really computer churn that finds an easier path to the upside right now, 1436 3/4. Rice up 1 1/2 to 1781 on a really dull day. Financials dead with the Dow off 40 points, 33,735, and bonds up a tic, 125.15. Looks like we are working our way to a nonevent holiday week.
Friday really didn't have too much action as we await weather reports in SA and the ongoing wonder of how long the Russia corridor will remain open. I would argue that Russia has 2 reasons to keep it open. One, their own grain and Fert exports, and 2, letting all the grain in Ukraine leave so food can become an issue for Ukraine locals in the future. Russia did that (starve the populace of Ukraine) 90 years ago, but the world seems to forget these things. Beans recovered Thursday break, 1428 1/4, plus 11 1/4. Corn up 1/4 to 667 3/4. Funds dropped over 60,000 longs thru the week and US cash is getting closer to SA offers into Asia. Wheat was a dime higher but couldn't hold it, 803 1/4, off 3 1/2 at the end of the day. Rice tried to look up $18 a hundred again but faded off to 1779 1/2, still up 6 1/2 cents. Adding open interest so some short dated funds are getting long again. Commitments has the funds net buying 1150 contracts on the week. It's really incredible how much volume they are willing to throw at such a small contract. 350 of those 18 calls out there waiting to get pinned in a holiday shortened week, with next Friday coming expiration. Dow looked lower but pulled up to 33,775, plus 194 points, and bonds leaked another 13 tics, 125.14.
Exports good enough Thursday morning in corn and rock solid in Soy. Market didn't seem to care much with beans soft all day and off 12 1/4 at the close, 1417. Corn climbed back to 2 1/4 higher, 667 1/4. Wheat a dog on more corridor shipping numbers, 806 3/4, off 10 3/4, but wheat spent a few shots under 8 bucks and bounced, so I guess for now $8 is the new $8.50. Rice looked garbage early on nothing volume, but the system couldn't get any followers and caught some close following stops on a spike back up to 1795, ultimately closing 1773, off a penny. There is a reason some of these smaller funds stay smaller funds. Dow in a typical churn day, 33,581, off 10 points, and bonds gave back 18 tics of the recent outsized rally, 125.27.
Wednesday trade letting some air out of the missile that hit Poland with most sources confirming it was part of the Ukraine missile defense system. More talk of the corridor being extended. Friendly weather for Brazil. Beans took it the worst, 1429 1/4 off 28. Wheat gives up 10 3/4 to 817 1/2, while corn recovers most of its drop, off a penny and a half at the close, 665 1/4. Rice off 4 tics, 1774, as the computer is hunting stops, and we have air on both sides. Dow in a dead day, 33,591, down 14, while bonds up a full point and 28 tics, 126.13. At this point either bonds are getting really extended or we have a big shoe about to drop somewhere else. Radar up and head low.