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Wednesday December 31st - Happy New Year

Soybeans - Nice rally today which in my opinion is where the market wants to go.  I look for higher trade after the first of the year. 

Corn - Market will get back all of the mad cow discount especially in the front months.  I do not want to be short here as there is more bullish fundaments than bearish.

Rice - Slow day today with little news.  Friday will be interesting with another sales report out but I expect it to be low based on the holiday season.

Cattle - Well, we said 71 cents was our guess (see yesterdays comments below which were based on the contract low made in March of 2003) and today's low was 71.175.  That was close enough so we took a shot at it and bought the market for a day trade.  In the last 20 minutes, the shorts started covering and we got a nice profitable ride.  No, I did not take it home. 

Are the lows in for awhile?  I'm not sure.  I would not be surprised to see a little rally followed by another test of the lows.  I do know this, at some point we will sell off to find support and that could be today's low or even lower.  It all depends on how the Mad Cow news comes out.

US Dollar - OK, I never ever say anything about currencies so here is a freebie (or maybe since the whole site is free...here is another freebie).  We may have made a low today.  It is not confirmed at all and should not be bought yet; however, we have an indication that today the low may have been made in this one for a while.  Time will tell and so will we if we are right.  If we are wrong, you'll never hear about the dollar again...well, not until we're right anyway. 

Tuesday December 30th -

Soybeans - As expected it was slower trade today.  Tomorrow should be dead unless there is a surprise in the Jan deliveries.

Corn - Nothing new today as expected, the same should be the case tomorrow.

Rice - As with the other grains, look for a quiet trade until next week unless there is a shocker in the Jan deliveries tomorrow.

Cattle - Well we called this one right.  We traded, rallied and then sold off.  We called for 200 point rally off of the low and got 150 points which in this market is close enough.   Once it started to sell off again, there was little doubt that we would head even lower.  Look for the market to trade freely tomorrow but should start lower and my guess is no more than 150 lower on the open.  Then we could see some real fireworks even if it is a half day.  If you were long you should have gotten out today.  If you want to play this market, wait a few days for things to settle down.  It is too early to give a target but right now 71 cents in February is looking like the current number.

Monday December 29th -

Soybeans - Profit taking and a little more normal type trade occurred today.  More news on the Mad Cow situation did little to relieve fears of importing countries although most Americans are just taking it all in stride.  Look for a quieter type trade the next few days.

Corn - I still do not see the big fear for cattle here.  Yes, we may see some demand drop but there are already huge numbers of cattle on feed right now.  What are we going to do, starve them to death.  Nope, we will feed them even if it is at a loss.  I think it will take weeks for this to work itself out and the fact that the cow came from Canada and over six years ago at that, they will be our fall guy.  Corn prices should stabilize and then follow export demand which should be there and even more so with this low of price.  My guess is the gap at $2.46 in March may be filled and then we fall back to test support.  That test would be very interesting as it could be very short lived if the demand is as good as I think it is.  In fact, we might not see much of a pull back at all. 

Rice - January Options are gone and now comes deliveries.  This should be a much slower week with the market settling down within 20 cents of where it is now.  Long term it still is a buy but near term, we could see the market try and check out support. 

Dow Jones - With the target hit, we now wait for a sell signal.  I have started watching the 60 minute to see if I can find one there.  It will occur there after a 30 minute sell signal which will put my finger on the trigger. 

Cattle - It should trade tomorrow but it will probably start limit down.  Look for a wild day and my recommendation is sell it if you get a 200 point rally off of the low.  This is for longs only not new positions for speculators.  Hedgers should let the market settle down first.  Things may not be as bad as they seem.  Cash producers should hold and buy pairs on a good break.  This game is too wild right now for Specs and the wind can change in an instant.  Not my kind of market to play in.

Tuesday December 23rd -

Soybeans - Continued selling has this market poised for a substantial break.  The fundamentals do not agree with this so it will be interesting.  Bottom line remains, do not buy it until there is a reason and right now, that doesn't exist.

Corn - Look for $2.40 in March.  We need more news to launch the market and with beans selling off, there is little reason to own this one right now.

Rice - We continue to sell off as we head into January option expiration this Friday and the First Deliveries on next Wednesday.  There is not much time to set the books straight from the calls to the deliveries so the sell off here is putting a squeeze on the longs.  Once this action is over, we will return to the fact that there is little rice and lower prices with a lower dollar is going to increase demand for a product we don't have.  Long term, we like it higher.  I'll start into call positions in March as it approaches $8.20 or on a buy signal which ever occurs first.  (Read our comments below as well.)

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Monday, December 22nd -

Soybeans - The sell off continued today as long liquidation is now in full swing and there is little news to turn the tide.  We are looking for reason to buy but it maybe a few weeks before we want to get any positions.

Corn - No change, huge fund positions should get un wound here near term so look for a test of $2.40 in March.

Rice - As stated below and in our weekly comments, we see the market lower near term and then higher long term.  Rice is notorious for getting too low during a bull move correction and that is what is happening right now.  Currently, we are trading option delta more than anything.  Our roll the last few weeks has netted us a lower delta so this move down is not that painful.  We will want to increase our delta position on a good buy signal which right now appears to be one to four weeks away. 

Dow - I see a top coming here but it may be 2 to 10 trading days away.  This type of indicator allows for an expansion top which could take us 100 to 200 points higher.  Then...Look out below as the market will correct with at least a 500 - 800 point correction.

From the floor...General Comments for Thursday December 18th

As I will be traveling back tomorrow after the market, this update will be my last from Chicago.

The Chinese were in today to look at the Board of Trade and as soon as they left, the bean market sold off.  What does that tell us?  Probably nothing.  Long term we like the beans and corn but right now we see little reason for advancement.

Regarding rice, we need to talk....

Today's action in rice (down 17 cents) was both good and bad.  At the lows there was heavy selling which means heavy buying as well with the buyers backing up.  It looks to me that this market is going to do what it always does and get too cheap.  Remember, the market can be irrational longer than you can be financially solvent.  Do not get caught in the mind set that this market is bullish and so it should be going up so I'll buy more.  Right now we have the big long in the market apparently sourcing rice which allows him to sell off his hedges.  The big co-ops are short so they will allow the market to go down and get too cheap.  When the market bounces it will be a big one but it might take news to bring that about and so far even the bullish sales numbers today were ignored as the market sold off big time.  It's just the same old rice market. 

The good news is we saw it coming and our positions are good as we head into January.  If they break it some more we will roll down our hedges to lower strike prices.  We will want to pay 10 cents for 40 cents of market potential.  Remember, I am not a raging $10.50 bull, but see it at $9.80 to $10.30 next year.

Bottom line...The fundamentals are bullish and the long term indicates we are going to make new highs in the next few months.  I have never seen the rice market top in November.  Get into a position you can hold and...well...HOLD!!!  We have taken a lot of money out of the market recently and we will now wait them out because, if they are reading this, you ain't getting it back.

One more statement...The biggest Arkansas Co-op doesn't market rice.  They just sell it and sell it and sell it!!!  There is a big difference between selling and marketing and let me tell you, they haven't got a clue how to market rice.  They put it in a bag and sell it as low as possible to move it and then call that marketing.  That is why the Co-op member for "Big Blue" is about to get the screwing of a lifetime.  Wait to see their final numbers for the 03-04 crop year.  If your a member, well, to say it nicely, brace yourself!!!

For what it's worth, the other co-op has my deepest respect as they are one of the top co-ops I've seen.  How is it possible?  The best co-op and the worst just 30 feet apart from each other?  What a difference 30 feet can make and what a difference 30 days will make in the rice market.

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Thursday Morning - December 11th

Corn and Beans - Reports this morning were neutral and that could mean lower prices as much of the market had braced for a bullish report.  If we get a pull back it should be bought and a close over $2.52 in March corn is a buy.

Rice - Nothing here at all in the report.  This market could pull back 20 cents just because of the time of year and no new news to feed this bull market.  A close over $9.03 in March begins the next push towards $9.45.  We will buy breaks.

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Tuesday December 9th

Soybeans - So much for buying a break.  Today's close over $7.80 sets up a challenge of the highs.  If news comes out that the Chinese are going home with nothing, we could see a hard break here.  Trade it carefully. 

Corn - Nice close today.  Everyone wants to fade the funds but I think they are right and their position is not that large.  Buy breaks.

Rice - Nothing going on here as the Rice Outlook Conference is going on in Mississippi.  The last two days has seen the market start lower and then bounce back.  I want to buy breaks but the time of year may be a damper on the market near term. 

Cattle - Top is in as we have been saying.  88 cents is first stopping point for February.

Natural Gas - Over bought.  A correction should happen near term.  Don't own it here.

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Monday December 8th -

Soybeans - News that China may be back in the market soon for more US soybeans gave the market a nice boost.  As I wrote on the 4th Thursday's high is major resistance ($7.80).  It could go either way but I will certainly want to buy a break.

Corn - Not much today.  Last Friday's COT shows a huge long position for the funds so they will be quick to sell without any additional bullish news.

Rice - Nothing here today.  Very quiet.

Natural Gas - If the warming trend starts, this one will fall big time.  This is not the time to buy it. 

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Thursday December 4th -

Soybeans - If you look at our comments below we have been warning about a correction.  This could continue for days but we think it will be healthy in the long run.  Today's high is major resistance now and the buy point if we turn back up.

Corn - As expected, we are getting a good correction.  My buy point is $2.45 in March just as pointed out back on December 1st.  (Look at comments for December 1 below)

Rice - We wrote yesterday that we now see a correction.  That is occurring but nothing has changed long term to our forecast.  We need to test the break out and that has occurred today and could continue for a couple more days.  Just remember, the fundamentals in Rice are not the same fundamentals as in Corn and Beans.   

Cotton- This market needs to test the support area.  It may have found it today but it will take several days to confirm.

Natural Gas -  Buy signals everywhere.  The only thing negative is that we are now over bought with this big move today.  The daily high is too high and a correction or consolidation should occur the next few days.

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Wednesday December 3rd -

Soybeans - Market showed first signs of being tired on this move.  It may not take much of a correction but I kind of expect one here the next few days.

Corn -  Good close today but I can see a test of a support line if weakness appears in the soybeans.

Rice  - WOW!!  Today's rejection of over $9.00 in the March may indicate a correction ahead.  Look for January to test the $8.45- $8.55 window.  If that is the case, I will buy a break into that level of support.

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Tuesday December 2nd -

Soybeans - Another strong day up.  Today's close puts a top formation in jeopardy to say the least.  We continue to day trade but no real long term positions are on right now.

Corn - Not much to say.  No real push with the beans up strong so a correction is possible especially if the beans do a little test of support themselves.

Rice - Power day after a break out.  Look for market to test its breakout point of $8.55.  A move to $8.58 is good enough.  Best advise is buy a 15 cent pull back as a following order off of the contract high.  I expect a correction in the next two days but how much of one is a question.  With WMP 13 cents higher today, look for a higher start on Wednesday.

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Monday December 1st -

Soybeans - Not much today.  A close over $7.70 will set up a test to challenge highs but chart still has bearish look.  That would change with the close mentioned above.

Corn - A test of the $2.50 level was rejected today but that was only the first test.  A correction from here is possible but we still see a move toward the $2.65 level for March.  We will buy a 5 cent break from here.

Rice - Today's close is above resistance and tomorrow is key to see if there is any follow through.  Today's close sets up the move to $9.25 in January and then a move to $9.80 on the long term chart which more than likely would be for March.