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Wednesday August 31st - 3:00 PM   -

General Comment - The damage to NOL remains a big question.  The market sold off today but rallied a bit before the close.  December did hit our $2.16 objective and I continue think we are close to a low in the market.   The damage from Katrina is going to keep everyone a little off the next few days but eventually, the market will have to deal with coverage.  While I think that is bearish up the river, for other points south, it is bullish.  Look for basis to start to switch in the next 5 to 7 days.  Also, the beans hit our objective in November at $5.95 so again, it could go lower but we begin looking for a low.

Rice - Market rallied into the close but still closed lower.  The NOL situation is bearish for rice as well. 

Natural Gas - Massive key reversal down on heavy volume.  If there is follow through selling tomorrow, the run-up on the hurricane is over.  If we are higher tomorrow, we could go higher still. 

Monday August 29th - 1:30 PM   -

General Comment - Hurricanes have a way of changing things especially when they head for a major grain terminal location.  LDP all corn TODAY!!!  Our reasoning is this; we have a market up 2 cents and a major grain terminal in trouble and it is one that sets some of our basis levels.  If they can't ship grain for a couple of weeks, the basis is going higher in our area.  That will lower LDP.  We recommend locking it in on all grain (corn and milo) now.  At 28 cents, it isn't going much higher so let's get it now!!!

Rice - We will wait on the damage in NOL before commenting too much here.  We could see some basis improvement in rice as well but I doubt it will be very much.  Looks like Katrina will stay to the east of the major rice areas so not too much damage there. 

Natural Gas - How did the gulf rigs take the storm?  That will be answered very soon.  Today looks like a spike top and many times market top on bullish news.  As I have said before, today's trading action can be indicative of a final top and that may be what we are getting in the energy market.  IF President Bush announces the reserve will open to cover the 1 billion barrels of crude lost in production, the energy market could pull back big time. 

Friday August 26th - 1:30 PM   -

General Comment - We are approaching our $2.16 target in December.  in fact, today's low is close enough to say we hit the objective.  In about 30% of the cases we have this kind of target, we get with 2% of the target price and reverse.  We will take a look at the COT report tonight and have more comments here Sunday night.

Rice - A nothing day looks like we are still range bound.  Both sides get excited only to have their hopes od a breakout dashed.  We are not trading it.

Natural Gas - Yesterday's action was not bearish as it looked like it was confirming a bear trap only to rally and today's buying put it into new highs.  No confirmation of a top here and PB is balanced at 70% so we could rally more here before its over. 

Wednesday August 24th - 3:30 PM   -

Corn - Another down day.  This should add a couple of cents to our LDP which we are watching very closely right now.  December still has a target of $2.16 but the market is does not have any real hard push.  If tomorrow we are down hard in the middle of the day, you may want to consider doing a day trade as we mentioned last night and then lock in the LDP.  Understand...you lock in the LDP ONLY if it rallied after you bought the futures. 

Here is what I'm trying to defend.  If we get a hard push down say around 11:30 and we are off 3 to 5 cents, if the market rallies back and closes up 3 cents, we have hit our downside target but were not able to lock in the LDP at that lower level because of the spike and subsequent rally.  If we buy the futures on a 3 to 5 cent spike down and then sell the market on the close, in other words day trade it, and then, lock in the LDP, we have captured the push to make a low.  IF, the market never rallies, then we still get out of the trade on the close but we don't LDP and we remain in the game looking for that day when the market bottoms hard.  I hope that is clear.

Soybeans - The PB is balanced and the sell off today could indicate a final push to $5.95 in November,  A bounce is still possible but remember, the market usually will go too low and that could happen here. 

Rice - While WMP didn't change, news that Thailand will be back intervening in their market keeps the idea of world prices firm near term.  The trend is higher but at a shallow pace.  We are not trading here yet.  It is very tempting to lock in the LDP and sell May futures.  What a spread!!!

Natural Gas - This is why we are not selling this market by picking a top.  New high close today busts the bear trap and reversal patterns and sets the market to go right back into expansion phase; however, we may setup a stronger bear trap here too.  WHAT A MARKET!!!  We are looking at some put option spreads but will wait for confirmation we are at a top.  That could be tomorrow or next month...WHAT A MARKET!!!  The sell signal remains at $9.87.  

Tuesday August 23rd - 2:10 PM   -

Corn - Key reversal down today after the crop conditions were worse than expected.  Today's high is major resistance and our downside objective of $2.16 remains fully in place.  We also have a $2.00 target but I'm not holding my breath on that.  The trend line is steep so we could bounce 10 to 15 cents from here and still remain in a longer term down trend making new lows at the time of the Mid-west harvest.  We are not wanting to LDP anything tonight. 

I might also point out that corn normally makes a spike low.  That means we could see a day where we are down hard only to turn and close stronger.  Like today only in reverse.  So if we are 5 to 6 cents lower in the next few days with the current LDP where it is.  We would suggest you be ready to buy futures during the day and then sell them off at the close, then LDP your corn.  Remember, it would be a day trade only and is to protect a higher LDP level.

Soybeans - Up 3 cents today with  PB now at 35%.  I can still see a bigger bounce here but nothing would surprise me.  $5.95 in November remains the target and for now I'll sell a bounce.

Rice - WMP - No change today but the futures is seeing something.  I think its just a little pre-harvest bounce which may not last too much longer; however, I'm not trading it at all.  The move up of 17 cents in September needs to see more follow through buying tomorrow or we may just drift back toward the support level of $6.90 in November. 

Natural Gas - BEAR TRAP???  Could be as we set a new contract high today by one tick and then sold off but didn't go down on the day.  The safe selling point is below $9.30.  I'm buying some puts here but will use a 60 minute chart to signal entry.  Fun market and I want to play but patience is more then a virtue here.

Monday August 22nd - 2:00 PM   -

Corn - Market rallied the last 15 minutes to close firm and up 2 1/2 cents.  Not enough for me to recommend LDP lock in but darn close.  Another day like today and we will be forced to lock in some of the corn just for safety sake.  This is where on farm really pays as we can call the price and take a free look for 60 days.   A close over 2.28 sets up a move to $2.35 and we could test $2.40.  The COT shows funds are still long but they have dumped a bunch of positions.  Ahead we have a frost scare or two to look at but that's way down the road.  I think the weather has little to do with things now...it is what it is.  We will look at crop conditions this afternoon and see if we cab get any direction from them.

Soybeans - Up 9 cents today with the market still a little oversold.  PB is at 30% and would allow for a test of the trend line.  That could be a nice bounce if it tests the longer term trend line.   Weather can still affect the beans but for all practical purposes, the weather market is dying for the grain markets.  Crop conditions should improve in tonight's numbers

Rice - Ho hum...  We do have an up trending market but just barely.  The 21 day Moving Average (MA) is over the nine week MA but PB is below 50% so there is no push.  We are out and waiting for direction. 

Natural Gas - Please read Friday's comments below.  Then look hard at today's action.  The first 30 minutes was strong and then we died only to see selling at the end of the day.  We could not make new highs.  Now that doesn't mean we will not make new highs this week but the action is just what we were talking about.  If we take out today's low tomorrow, it is a major sell signal and a stop should be put at today's high.  If I were trading it, that is what I would do.  If I were trading it.  Remember, there is risk in trading futures and in this contract, that is an understatement.

Friday August 19th - 2:00 PM   -

This week ended with the corn market in a tight range for December.  Resistance is now this weeks high and support is at this weeks low which is only 1/2 cent above the pre rally lows at $2.20 3/4.   Next week we will watch those levels to see if the market can hold.  This afternoons COT report will be watched very closely as the funds were not big participants the last three days.  If they are still long, that sets up long liquidation but in fact, I can see that being a spring board to a rally.  Remember, we still have to worry with a frost scare and next week there will be lows in the 50's for some of the corn belt.  For us, we want to lock in LDP and probably very soon.  Today it was 21 cents in Texas as the basis collapsed Wednesday.  We are 100% sold and right now double dipping.  We are making money in both the futures and the LDP.  Get ready to lift some hedges and let the LDP do its thing.

Soybeans - New lows today signals more pressure.  Remember our longer term objective.  It's $5.95 in November.  Today's low was $5.95 in September and $6.04 in November.  We are getting close to a low but there is no sign of it yet.   We are 50% sold and will hold in that position as we still strongly that a bounce pre-harvest will occur.

Rice - Lower today as harvest is right around the corner.  In Texas yields are better than last year in many areas but the eastern area is having problems.  Louisiana is reportedly have some problems as well.  This is no time to sell the futures and I don't see a reason to own it either so as I have been saying for months....we are not trading rice.

Natural Gas - As expected, the market started a bounce today.  November crude up over $2.00.  To you who bought crude today...I have a bridge in San Francisco I'll sell ya.  It even has a golden name to go along with your golden crude oil contracts. 

This bounce is not one to buy.  Even if it keeps going and makes new highs, it is not smart to buy a market like this one.  The expansion market has stopped and you sell the first bounce after an expansion phase, not buy it.  I look for gas to rally with crude but look for a very quiet day in the next few session as the market stalls just below the highs.  If you see a day like that, then put stops against the lows because things may get very exciting as the top confirms.

Thursday August 18th - 5:00 PM   -

No follow through on the key reversal yesterday but the low was not violated.  As long as yesterday's low remains in place we could still bounce 10 cents or so in corn and 25 cents in beans.  Odds are 50-50 and we are staying short. 

Rice - Off today but no real movement.  We remain out with no clear direction.  A lot of business is being talked about but nothing happening.

Natural Gas - Now THAT is what I call follow through selling.  Down 43 cents today after the topping action of yesterday.  Odds are very high that the top has been formed.  We may even have an Island reversal.  PB went from 88% to 65% in two days which is indicative of a top; however, I think this one may top hard so don't be surprised if we see a run back toward $9.00 before it rolls over for a couple of months. 

Thursday August 18th - 9:00 AM   -

Yesterday's trade provided a key reversal up in corn which indicates we will try and close the gap and test the neck line of the head-and-shoulders formation.  This is a rare event if the formation holds.  Look for December to try and trade back through $2.32 to destroy this chart formation.  That is about 6 to 8 cents higher.  The trend is also too steep and the funds are not short...all good reasons for there to be a moderate bounce here.  If you haven't sold the whole crop, wait a little while and lets see what happens over the next few days. 

Soybeans have never bounced back to test the back side of the trend line which was a long one so we could bounce here back to the $6.42 to $6.52 window. 

Rice - No comment.  There is nothing go9ng on here

Natural Gas - THE TOP???  Could be.  We have been warning that an expansion market is totally unpredictable and the top could occur any time.  Today is a big day.  Here early the market is lower but it need to close sharply lower. 

Wednesday August 17th - 8:00 AM   -

Corn and beans tried to rally a bit yesterday but couldn't do it as funds sold near the end.  We may not see the market bounce at all until it is extremely over sold and that is a ways a way with PB sitting at 33% in Corn.  Don't get caught thinking "this market has to rally so I'll cover shorts and out them back on higher!!"  That kind of thinking can be very expensive.  Last night the market didn't do anything but the buying is letting the market come to it and with the funds still long, it will surely do that.  I estimate funds are still holding 40,000 contracts long as of this morning.  What if they go short???

Rice - WMP down 7 cents.  Futures is trying to hold but it looks to me the WMP is going to slowly head lower into the Arkansas harvest as the CCC braces to take over some rice in loan.  I have no opinion here it can go either way of just sit here for a few more months.

Natural Gas - Like the energizing bunny...it's still going.  If we had a hurricane in the gulf to the mix, this is is going to get crazy.  I still look for a top in the next few weeks as we continue this expansion market.  Don't try to pick a top.  When it happens its going to be a good one but it could come from higher levels.  Much higher than we ever thought.  That is what an expansion market does. 

Monday August 15th - 8:00 PM   -

Big day down today as the market saw funds come in to sell corn and beans both.  The funds are still huge longs and they will be in sell mode for a while.  I see a rally in the next couple of days but that will not carry long as the selling should be about 5 to 7 cents higher from here if not closer to today's close.  In beans we are approaching a level where the market will pause for fear of frost later this year when the beans are vulnerable.  Not that there will be a frost but there could be a scare for sure. 

On a bounce we would be sellers in the corn and for the beans, we'll stay at 50% sold right now knowing we can sell cash and buy futures or options later. 

Rice - Market closed a bit higher today but well off the lows.  We are still in no man's land and have no desire to own or short this one.

Natural Gas - Today was a day of consolidation but there was really no selling to news to push the market lower.  We remain very over bought but in an expansion market which can go on for another two weeks.  We are approaching a top but no sign of it yet and we wouldn't trade it here for anything.

Friday August 12th - 1:30 PM   -

Interesting day.  In December corn, the market made its high and low of the day, which was a 6 cent range, in the first 10 minutes of trade.  After the lower open and sharp move down, the market tried to rally but couldn't hold it and sold off as the funds came in to sell around 10:30.  All in all, not a good day if your long the market. 

We will be all "eyes" looking at the fund position from last Tuesday in this afternoons COT report.  We estimate a long position of 50,000 contracts.  It they are longer then that, the market has some real downside potential from fund liquidation this next week.  I doubt the funds stop at liquidating as they may decide to short the market by a pretty good slug over the next two weeks.  Longer term, I think the Funds see the lows for 2005 later in the year, so why not short it here.  

Let's talk . . .  There are some traders who think corn numbers will be lower next month than today's S&D report.  I still think that when all is said and done the numbers will be around the 140 bu. per acre number.  The 1.9 billion bushel carryover is plain bearish in my book.  Here is the thing to think about.  The national average corn basis is minus 19.4 cents.  Let's say its 20 cents...that is a negative 20 cents or 20 under the futures.  The average price for usage (you'll have to take my word here) is 3 cents UNDER March futures over the past 5 years.  So, if you are with me, we can take the current March futures, subtract 23 cents and we will have the cash price for corn on the national index.  Crude, but it gives us a good idea.  The current March futures price is about $2.40.  Subtract 23 cents and we are at $2.17cash price and the government is forecasting a $2.00 price with a range of $1.90 to $2.10.  No matter how you dice it, we are still too high.  My guess is we are 17 to 25 cents too high still and we will slowly take away that premium over the next 6 weeks.  I don't expect many more 8 cent days like today and there will be some rallies but they should be sold. 

One more point...the market never goes to the equilibrium price, it always over shoots it so look for the market to go too low before it's all said and done.  March at $2.10 to $2.15 is not out of the question.  THEN, we want to own the market but for now, we remain 100% sold.

Rice - Obviously the report was bearish.  As I have been saying, we are not trading it and don't want to until there is a better idea of movement.  If you look at it on the longer term charts, we really are not moving much at all.  I can paint both a bullish and bearish picture but neither are very strong arguments. 

Natural Gas - New highs again but down off of those highs.  No sign of a top but today maybe an indicator it is very close.  Even so, there is no way in heck I'm going to short this thing here.  We are expanding the market on the short term charts and now have entered over bought conditions on the daily with PB tonight at 86%.  This market will put in a top in the next 8 days and I would put odds of that happening at about 90%.  Again this is A top and maybe not THE top.  Time will tell but I think we are about to have all the shoeshine boys long energy.

Thursday August 11th - 8:00 PM   -

Sorry I'm late tonight but things just happen.  There is no real reason to comment as the markets did nothing today in front of tomorrow's report.  We'll have an update here by 8:30 CST in the morning.

Wednesday August 10th - 4:00 PM   -

Fund buying in corn lifted prices higher at the close as the market is setting up to factor in the USDA report on Friday.  Some traders think the market has assumed a 10.3 billion bushel crop and that is in the market...I highly doubt it.  Basis levels are not improving and until that happens, the cash market is pointing to lower futures over the next few weeks.  LDP was 13 cents here coming in this morning and that is almost a record low basis for corn this time of year. The futures is overpriced or cash corn is under priced.  It may be a little of both but longer term I still see futures lower unless we are preparing to make a new plateau base in futures and that is also doubtful in Mid-August.  Tomorrow should be a little slow as we await Friday's numbers.

Rice - A little lower today.  The report on Friday may see an increase in exports but I doubt there is a big consumption change.  We'll look at the numbers and see if there is any direction to be seen.

Natural Gas - WOW!!!  Where is the top??  Maybe the right question would be..."IS THERE A TOP???"  Yes, there is one coming but with crude up $1.81 how can Natural Gas sell off.  Crude supplies fell for a 6th straight week and it looks like things are going to stay tight for a several more weeks.  The real question is how can we pay to dry grain and run tractors if these levels stay with us very long.     

Tuesday August 9th - 4:00 PM   -

Markets worked lower today after all weather models now show big rains for Midwest coming.  Market action today in corn indicates a couple of days of sideways to higher trade is possible heading into Friday's USDA report.  Funds are selling but not that fast.  Funds were estimated to have sold 4,000 today so from a week ago they should be down to just 50,000 bushels long.  That is both interesting and troubling.  The average guess for the USDA report is 10.220 billion bushels and a yield of 138.  I see that as too low but I won't go against these guys with the big grain models.  My guess remain 140 bu./acre and a 10.450 billion bushel crop.  If we come in higher than 140 bu/acre, corn will collapse Friday as long as the weather forecast stays like it is tonight. 

Rice - WMP unchanged and futures with a late rally.  Today's close is over the 9 week moving average so some small specs might be getting out.  Funds were long about 1100 contracts this time last week and they have been buying more so there is some accumulation of contracts underway by the funds for sure.   $7.07 is resistance.

Natural Gas - Not much follow through today.  The market was lower but closed down just a few cents and on the high of the day.  It is possible we may top this market in the next few weeks as the weather demand may fade.  There is a storm we are now going to be watching but nothing that is threatening production yet.

Monday August 8th - 4:00 PM   -

Crop conditions were a little lower but seemed to be in line with trade expectations.  Near term the weather looks hot but there is little doubt in 5 to 10 days things are going to change as all weather models agree we are going to get wetter.  Look for maybe one more stab to higher prices but you must sell on any rally.  In fact, figure up what you need to and scale into it.  I think the most corn can rally from here is 10 cents and I would 8 to be safe.  Divide up what you need into 5ths and then sell it 1/5 on each 2 cent rally from here.  Then play with the last 20% in case I'm wrong and you can get a little more out of it.  Downside remains $2.16 in December but that won't happen over night.  It may take 6 to 8 weeks to get there. 

Rice - Another up day as the the current trend is holding.  Today's close is the third close sitting right on the 9 week Moving Average.  PB is over 50% so we might get a little more out of this rally near term. 

Natural Gas - Possible reversal pattern today.  I expect this market to top hard but a good sell off tomorrow adds to the odds we are making a near term top. 

Interest Rates - The Federal Reserve as expected increased the lending rate by 25 basis points.  This is what we expected as well.  In fact we think they will continue to at least 4.00 percent before stopping for a couple of months.

Monday August 8th - 8:00 AM   -

Market moved higher overnight on weather with corn up 4 and beans up 7.  If beans can regain the trend line and close above it, we may see another leg higher in the beans.  This week is key.  Read Friday's comments for our positions.  Nothing has changed.  We would sell corn if it can rally back toward to $2.38 and then $2.43 which are our two resistance points today.  I look for the gap in corn to be closed on the open this morning.  While that does away with the $2.00 December target, it doesn't change the long term target of $2.16.  Our recommendation continues, "have a bearish mentality" don't get bullish here.

Friday August 5th - 3:00 PM   -

The break today in the beans maybe the signal that it is over for 2005 but there is still a chance that this was a bear trap.  The trend line is key in beans.  IF we can trade back above the trend line in the next two days and then hold above the line through next Friday, odds are that its a bear trap; however, odds don't favor that as being the case.  We moved to 50% sold today when the trend line was taken out.  We will get to 75% sold on a rally to backside of the line and then play with 25% as long as it makes sense.  If we start to see a change in forecasts for next week, we will get to 100% sold and that could happen on Monday.  Today's low is good support. 

In corn we 100% sold at higher levels and today's action sets up a target of $2.16 in December with a possible shot at $2.00.  If we can close the gap made today that will help.  Just remember, the down move will have some rallies and that's your chance to catch up on sales. 

Rice - Still don't want to trade it.  We sold off today but ended off the lows and in the middle of the daily range.  PB is exactly 50% tonight so there is no real direction right now.

Natural Gas - Higher today with PB at 74%.  No sign of a top yet and with the bad part of hurricane season coming, who wants to sell it. 

Thursday August 4th - 3:00 PM   -

Nothing new from us on the grains.  We might see a bounce but there is major support at $2.36 and if it is violated, the fund selling could be tremendous.  Where will the commercials support the market and start buying?  That is a good question but I doubt its much above $2.30 if at all.  Remember, the basis is very weak right now and until I see it start to improve, the commercials are not having any problems with grains supply.  Eventually, they will as farmers stop selling but for now, I think we could break to $2.30 easily.  Even so, I'm not saying that will happen tomorrow.  A bounce and some sideways consolidation is possible for one to two weeks but longer term, I think we are going lower as I have outlined on this page the last few days.  We remain 100% sold in futures and will wait for basis improvement to lock in cash.

Soybeans - We are in that period where we need to work higher for sure.  The longer term forecasts are a little wetter but not that much.  I do think the pattern is changing and after a few days, we may see some more pressure here as well.  We are at 25% sold and hoping for a rally to get more on the books.

Rice - Nice follow through higher today.  The chart is looking pretty good.  I keep asking anyone asking, why trade it?  We'll just wait on the sidelines and pray that this rally is because someone knows something we don't and its VERY bullish...wouldn't that be nice.

Natural Gas - We closed higher but in the middle of the trading range.  We are watching looking for direction. 

Wednesday August 3rd - 2:00 PM   -

Now this was a trend day DOWN for sure.  We made new lows every 30 minute period until the 12:30 time slot when we had a "please sell me" rally.  The weather is turning wetter as the front is now expected to stall over the Midwest and produce more rain through the weekend.  Fact it, the pattern has changed and the market has topped.  Here in South Texas, the LDP on corn was 7 cents coming in this morning.  We have a loan of $2.08 so that is a county posted price of $2.01 with a December futures price at $2.40.  WOW!!! That is 39 under December.  With that said, our recommendation to sell 100% was FUTURES only not selling cash.  If you are selling turn row, then sell it but your getting loan and that's it.  This is a futures play and has been for months.  Most of you already knew that.  We could still see a bounce here in the next week but I wouldn't trade for it.  We are 100% sold now at a very nice average and will wait for the basis to change before working out the cash.  

For soybeans, we are 25% sold tonight and regretting not being 50% sold.  We may push to that level if the trend line is taken out which is at $6.75 tomorrow.  Today was almost a massive key reversal down and some tech's would say it qualifies.  We didn't get over yesterday's high as we equaled it and then we closed below yesterday's low.  That makes today's high major resistance. 

The bottom line for the grains is that the weather has changed.  We are looking at some extended lower moves and when I look at crop conditions of all the corn states and then look back at prior years, I can see a 140 to 142 average still in corn and that is too high to support prices over loan.  Maybe that is why we are selling corn here in Texas below loan.

Rice - The change yesterday spawned some buying for futures today but I doubt it lasts very long.  The revaluation of China's currency has added some value to world market price.  Early reported on harvest in Louisiana and Texas are all good with yields coming in above last years level in some areas.  The record crop in the far western Texas counties may last year may be safe from being broken this year but early results are running right with the record crop of last year and grades look good. 

One more thing on rice, watch for the amount of rice which may be forfeited in Arkansas.  We have already seen 25,000 cwts go over to the government.  They may take 2 to 3 million more and then the question will be, how do they get rid of it?

Natural Gas - We had a nice break off of the highs today and that may allow some of the air out of this move.  In fact, it is a hook reversal down after working higher in the day but closing lower.  We need follow through selling tomorrow to confirm an intermediate top.  That may or may not happen. 

Tuesday August 2nd - 9:00 PM   -

Markets are open and just a tad lower here at 8:30.  In general, the market is trying to figure out the weather.  For me, the corn at this point is not going to change much because I'm convinced now that the yield is going to come in higher than 140.  The main reason for my thinking is the other states corn condition are just too good and they have adequate moisture to finish.  The dry areas are needing moisture to fill out what they have but what is lost is lost.  So for corn, we want to be sold and that means 100% ASAP.  Today's low in corn is major support and a move under $2.40 is going to bring in the funds and they have a bunch of contracts to sell.  DO NOT BE LONG!!!

Beans on the other hand can have a big move higher if the weather damages the bean crop.  We are heading into the main time of year for weather and as we look at the drought index, we see the same thing for beans as corn.  This problem is in a specific area and it's not all across the Midwest.  That doesn't mean it can't get there but we will need a lot more wide spread damage than what we have now to see a major bull move in the beans.  We could certainly bounce another 50 cents but for a $2.00 move, we need some major heat and no rain for about three weeks.  It could happen but at the first sign of a weather change, we are going to live through some major selling.  Best advice is to start selling scale up NOW in the beans.  We''' get at least 25% sold this week and hope the American model is not right for next week and get ready to sell more on a push in the short term. 

Rice - WMP - up 15cents to 21 cents depending on how you look at it.  Today we switched from 2004 loan rates to 2005 and that is a 13 cent difference.  The 2005 rate was changed by 15 cents and it was an increase.  If you are charting WMP then you need to increase the price by 21 cents because that was the change overall.  I'm not sure how the market will respond tomorrow but I wouldn't be that surprised to see very little impact of the change today.

Natural Gas - I wrote last Friday we had a strong target of $8.25 to $8.35 and today's close at $8.41 certainly achieved those levels.  Remember, a chart objective is not necessarily a place where the market will top but we should look for a correction and soon.  The short term remains extremely overbought and the daily chart is getting there.  PB is at 70% tonight with the 30 minute at 89% and the 120 minute at 79%.  Both indicate a strong profit taking correction is dead ahead.  That is no reason to sell it as it only says to LOOK for a top not to trade for one.  In fact, this is a good market to watch at this stage.    

Tuesday August 2nd - 2:30 PM   - Another Quickie

I want see some comments tonight and look as few things before making much of a comment.  Corn performed miserably today while the beans still have hope of higher prices.  We'll do some work, let the market open tonight and then update with comments tonight at 9.

Tuesday August 2nd - 7:00 AM   - Quickie

Make sure you read last nights analysis.  For today, watch out for a bearish reaction to a bullish report.  Not that I think it's going to happen but it could.  The market finished up 3 over night but basically opened up 3 cents and then died at that level for the rest of the night.  If we take out yesterday's low, we may see some liquidation hit the market and with rain in the forecast just 2 days down the road the bulls are going to have a hard time getting any momentum on a move higher.  If you aren't to at least 75% sold, get there if we trade down to $2.43 in the December contract.   

Monday August 1st - 2:00 PM   -

The conditions report came in worse than expected and corn is 3 higher in the over night trade.  Beans are up 7.  I'm not surprised by the report because corn is pretty much over the hump and should hold about these levels until combines start rolling further north.  The current conditions report still supports a 137 bu/acre yield on all the acres planted which is our forecasted yield for corn; however, I'm starting to think it may be higher. 

The worsening of the Illinois crop is more of a surprise in today's report with 55% of the crop poor to very poor.  The final yield for Illinois will be interesting.  Consider this, in 2002 on this date, there were 11 of the top 18 states with a reading of 10% or greater in the very poor category.  Tonight there are only 3.  Once again, this makes it a regional problem with most states doing ok to very good.  It's just that Missouri and Illinois are two of the three states with the problems (Texas is number 3).  Missouri is the 8th largest producing state and Illinois is number 2.  With a little math and a trend line formula, we can assume what yields might be in each state if conditions hold as they are right now and it doesn't take a rocket scientist to see that conditions must get much worse to have a 137 bushel yield.  In 2003 with all of the damage, the yield was still 142 bu. to the acre.  That is why I'm thinking things may not be as bad as I thought when it comes to numbers.  If we loose 1.6 million acres as non-harvested and average the same as 2003 at 142 bu. acre (which is the same as the current expected harvest acres of 73.6 million at 137 bu. acre), we still would cut the carry over by 400 million bushels but that would still forecast a price under loan.  Even so, remember, it's still the stocks-to-use number that is going to be important and we are using  400 million bushels more this year than in 2003.  That will compound a shortage. 

Right now, the bottom line is we need more damage to show up or the market is too high in corn and any rally should be sold.  The good news is we are going to lower the carry-over.  Not a lot but it is going lower and that could be helpful after we get to October. 

Monday August 1st - 2:00 PM   -

I need to update this prior to the condition reports  which come out later this afternoon (3 PM CST).  I'll update this page again tonight at 9 PM and make a full comment then.  Corn has closed lower after trading higher all day.  Beans sold off but then came back to finish unchanged to a little higher.  Weather patterns for the month of August are being looked at hard by everyone right now and it looks like it may be wetter than July but that's not saying much.  We are short at least 75% in corn and if beans drop below $6.70 in November, we will start selling some beans.

Rice - Sell off today suggests another test of lows.  We have closed the gap and the market is probably sideways right now.  We could work lower longer term but the chart is not very convincing yet that a new bear leg has started.  For producers, we need the market up $2.00 or down $2.00 but not where it is. 

Natural Gas - Same comments as last week.  We have some objectives that are above the recent highs at $8.25 to $8.35 in September.  W could get there this week the way its going.  One of the problems with Natural gas rests with a small position by speculators in last Friday's Commitment of Traders Report.  There is room for expansion big time in that area.   PB is also at a very manageable level of 66%; however, the 30 minute system is screaming overbought at 91% at the close.  WOW!!!  That usually signals a day or two of consolidation and profit taking.  Look for it the next few days.