Thursday trade looked to be a recovery day in the grain room. Export sales really didn't bring anything to the table, but we still got a 4 1/2 cent bounce in Sept corn, 400 1/4 and wheat gained 9 3/4 to 571 1/4. Beans looked solid early, leaked like they have been lately but recovered to 1063 3/4, unchanged. Rice got a 12 1/2 cent bounce as well, 1466. History doesn't bode well for the next few months if we do in fact have the stocks, especially corn, on farm that the government says, but I would argue that farm stocks is the biggest guess component of the WASDE balance sheet. This is the time of the year where that miss could be the greatest, but the funds have placed all their eggs in the basket of government certainty. I guess we will let basis sort it out. Dow holds Wednesday pop, 40,089, plus 40 points while bonds gain a point and 3 tics, 119.27.
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Hump day trade stable in corn again, 395 3/4, plus 1 3/4 as the funds appear to be as short as they can stomach and hope the Calander forces out the farmer down here to let them out of their big bet. Wheat drops 10 1/2 to 561 1/2 and beans fall another 13 3/4 cents, 1063 3/4. Rice down 6 1/2 to 1453 1/2. Seems like the funds have built in a pretty bearish WASDE and no one ever buying US grains again this year until the new crop comes. Dow pops 453 point, 40,049 and bonds gain 10 tics, 118.24. Money boys getting more and more confident the Fed will drop rates before the election.
Tuesday stable in Sept corn, 394, plus 3/4 and wheat, 572, up 1 1/2. Products got hit and beans down 19 1/4 cents, 1077 1/2. I am surprised at the size of the bean break. Dow off 54 points, 39,596 and bonds off 18 tics, 118.14. Just not a lot to say about Tuesday.
Mostly weaker trade in the grain room Monday after a benign weekend empowered the short funds to get more short. Corn off 17 1/4 cents, 393 1/4. We have all these stocks and July corn is over sept corn? Funds can't bully July futures, but man, the farmer is stubborn. Commitments has funds short 337k corn as of last Tuesday, and I think a fair amount more today. What could go wrong? 1096 3/4 beans off 29 1/4. Wheat drops 20 cents, 570 1/2. Down is the current path of least resistance, at least for now. Hurricane went into rice territory in Texas and did some damage, rice up 23 cents, 1479, on a lot less volume than the break. At some point I expect the same kind of action in the other grains. Dow looked at 40K but faded to 39,650, off 45 while bonds picked up 6 tics, 119 even. Talk of Fed interest rate cuts in front of the election back on the table.
Friday trade post-holiday had bids across most of the grain room with wheat leading the way, 590 1/2, plus 16 1/2. Corn gained a nickel and expiring July is over September. 410 1/2. This kind of trade makes me struggle to believe the USDA numbers. Beans up 8 1/2 to 1126 and July is 60 over sept, Meal is $50 over. Rice bear hit us again for minus 43 cents, 1456 and getting into insurance payout territory. Commitments will be delayed until Monday close but I expect to see a big increase in Fund short open interest. Dow up 59 points,39, 695 and bonds up another 26 tics, 118.26.
Wednesday trade news led by bean oil short covering, which helped beans gain 6 3/4 by the close, 1117 1/2. Corn slipped 2 1/2 to 405 1/2 and wheat was off 7 cents, 574. Rice lost another 7 to 1499 as the committed bear sold a pretty good volume more. This does provide a good lesson in observing who and how much. Bean oil fund short was disproportionate and seasonally risky, and now they are paying a lofty price to buy their way out of the short. Reality is that they made a lot of longs give up first and those computers are good at harvesting your misery. Corn fund shorts are obviously over their skis, but they can stay silly longer than some can stay solvent. Rice short is clearly on an agenda by now and Monday afternoon commitments should give us a clue of who. Quiet Dow off 52 points, 39.646 and bonds recover a point and 11 tics, 118 even.
Tuesday trade more of a stabilizing day after a big set of reports Friday and 4th of July coming up. Corn up a penny, 408. Beans up 3 1/4 to 1110 3/4 after looking higher early. Wheat gives back 9 1/4 cents, 581 and rice has an early pop, but no one defended so we faded to 1506, 5 1/2 lower. Dow up 177 points, 39,688 and bonds recover 18 tics, 116.21.
After the weekend to digest the numbers from Fridays reports the markets Monday mostly found stable to firm ground. Sept corn back and forth but a 407 close is only of 1/2. Sept beans looked below the buck but closed up 7 1/2 cents, 1107 1/2. Sept wheat gained 16 3/4 to 590 1/4. Sept rice looked like it got pushed down into stops, 1511 1/2, off 27 1/2 but bid. Open interest gains say it wasn't just pure liquidation. Dow was up 300 but set back to 39,511, plus 42. Bonds off 2 points and 7 tics, 116.03. Over 4 points of bond break in a week.
Last trading day of the month and several government reports sure led to some debatable action in futures. Corn given more acres and plenty of stocks, abet in hard to truly quantify farmer hands and Sept briefly checks a $3 handle, closing off 15 cents, 407 1/2. If these numbers hold water over the long haul, we will need to reestablish what a low price for corn is. I have some questions and observations that I will post internally thru the day Monday. Sept wheat off 6 to 573 1/2 and as long as we handle harvest in an orderly matter, I expect global forces to soon lead wheat. August beans off 2 3/4 cents, 1133 1/2 and Nov off 3/4 to 1104. It's been noted that our meal strength goes against what we should expect given the size of SA soy crops, but the proof is in the exports, so something is amiss. Sept rice off 5 1/2 cents, 1539. Acres now within 20K of original beginning of the year internal estimates. We will go deeper into those numbers thru the next few days as well. Dow opened up the churn range a bit on Friday which leads me to be wary of a bigger move in the coming week. 39,469, off 81 points and bonds lose 32 tics, a full point, 118.10.
Thursday exports held no real surprises and the grain room leak mostly continues. I want to remind everyone again that a lot of the fuel at the tail end of this break has been longs forced out by delivery clerks and already short funds getting shorter. I know there is talk about this being a remake of 2014, but it's way too early to me to make those comparisons and market bias didn't have this kind of participation. Corn off 6 1/4 to 413 3/4 for a new low. Beans down 10 1/2 cents, 1152 1/4. July rice pummeled, 1675 1/2, minus 104 1/2. Wheat, which helped start the break bounced 18 1/2 cents, 559 3/4. Quiet churn in the financials with the Dow up 10 points, 39,550 and bonds gaining back 12 tics, 119.10.
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