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Monday July 30th-
Corn We traded both sides of unchanged today
but ideas that the crop is still deteriorating rallied the corn at the
end. Sue enough, the crop is down to 58% good to excellent. This is
what we have been saying; however, using history, odds favor the
condition stabilizing vey soon unless something major happens. Even so,
we stand by our ideas that $3.60 in December is going to be the
average. Look for this rally to hold on into mid-August and if Soybeans
can catch fire, it could be a good push higher.
Wheat Sharply lower and it looks like a bull
trap. We will give it some room as it could still correct and rally
back.
Beans Higher today on forecasts. There is
still time for a problem here but don bet much on it. We want to sell
a good rally her.
Rice We are not going anywhere here t the
selling is still strong enough to test support.
Natural Gas Read our Friday comments. They
are headed for the exits and things are changing in the tropics. We are
long here and believe $7.00 is in sight. A test of support is possible
this week as well.
Cattle Up a little more. Nothing to say as
the market awaits more news.
Dow Looks exactly like last week. We were up
a week ago today after sharply low on that Friday before. Dont bet
much on anything here but I can still see a further break.
Cotton Up 94 today as we look for resistance.
Friday July 27th-
Corn Up 4 going into the close as the market
saw some short covering for the weekend. We have seen that before.
Over the past 2 months, Monday has come in like a bear and the market s
have had a hard time being up on Monday. 6 out of the last 8
Mondays have been lower than the Friday close. Of course that
doesn't mean anything. What matters right now are forecasts.
Looking at the current 6-10 day forecast shows little heat and rain
moving into the Western Corn belt; however, that thing has been wrong
all summer so I'm not putting much stock in it.
Let's Talk: In general the chart remains in a firm down trend.
PB in corn is 38% which is not oversold at all. Tonight's COT
report shows funds have stopped liquidating positions while small specs
are selling away and adding to positions. Commercials are short a
total of 24,000 contracts compare to the small spec position of short
111,000 contracts. The funds hold the other side. Now
remember, that is the "net" position. The commercials have almost
3 million contracts on right now. What this means is that the
commercials are pretty well balanced and as the selling keeps coming
into the corn it is not from power traders it is from small
non-reportable traders.
A bounce from here is still very likely as we start to look down the
road at the demand situation. Many buyers were already figuring a
need to pay $4.00 or more for corn and now that it is no where near that
level, there is no reason to lower the demand for corn. In fact,
one could argue, the demand will be higher than on the books because of
the big crop and much lower prices so plans to use alternatives to corn
is pretty much out the window.
Near term, look for a bounce into the Middle of August but then a
turn lower. This will move down into the start of harvest when the
crop size is pretty well known and the farmers who need to sell to make
room for bumper crop will have don so. Then expect a rally to do
two things...get farmers to sell the 2007 crop and also, encourage
plantings in 2008. Anybody want to guess on acres for next year???
Wheat Quiet day accepting the value.
Should move higher if something else doesn't upset the wagon.
Beans Down 7 and losing more to corn. I
expect the spread in beans/corn to approach the $4.80 level before they
stabilize but longer term, I want to own beans over corn. Not yet
and don't jump the gun.
Rice Down 8 as we continue to go nowhere.
Look for the drift to continue into the end of August.
Natural Gas Up 16 with solid buy signals in
September. This is on the short term chart and yes we are long a
very little. We need a close over $6.50 to send this one for
resistance which is over $7.00. The funds are HUGE shorts and they
added to positions this past week. They have over 110,000
contracts short. I think traders have lost site of the big picture
here and if the funds head to the exits, the sellers will be backing up
big time looking at the discount in value here.
Cattle Up 140 points as we test resistance.
We are long in the field and like that position.
Dow Another big down day (208 points) as the
market approaches major and I mean major support. This sets us up
to move down toward 12,500 if we close under 13,250. Anyone long
here since the first of May has a loss and it can get much worse.
There is no sign of blood in the streets but that could be here next
week. I have been in cash since 12,600 and waiting for this break.
We will see if the bulls can regroup but tonight there are a lot of
people wanting a bounce to sell.
Cotton Up 71 and working more in a
consolidated manner. No comments here as we are not trading it.
Thursday July 26th-
Corn Higher today on weather. The
market started strong and then mid-day collapsed only to find more
buying and turn back higher. We finished up 5 to 6 but still off
the highs. We will be selling a good rally here and think we have
into the second week of August to pull that off.
Wheat Nice move higher today even with the
break at mid-day. We remain looking to sell the final 20%.
Beans Up 7 and 13 off the lows which were made
15 minutes before the close. Who knows why we broke so much and
then came back toward the highs again. We still see the beans as
the last chance for a grain rally before harvest.
Rice Unchanged but that is 16 cents off the
highs. The market pulled back with the other grains but then
didn't rally at the close like they did. We are still thinking its
going no where on its own for now.
Natural Gas A little higher as well. We
could be probing for the low but I am not buying yet.
Cattle Up 40 and holding with the firm grain
prices.
Dow As I type this we are down 342 points.
This could be the beginning of the correction we have been talking about
for months.
Cotton Down 110 and this maybe somewhat from
the outside markets. Don't be long here either.
Wednesday July 25th-
Corn A sell off in the second half of trading
took away some gains here today. Weather is a little wetter and
really the technical action says we will test the lows again. No
reason to do anything here yet as we take all of the weather premium out
of the market.
By-the-way. The 6-10 day is hot and dry but that is exactly
what the situation was 10 days ago. This weather patter had locked
in so don't trust any forecasts over 5 days as they have gotten wetter
all year long.
Wheat Be careful here as the market was weaker
today after making new highs. We need to see a higher move in the
next few days or this will be a bull trap.
Beans More downside pressure today.
Right now the bean corn spread is at $5.13...the low has been $4.80 over
the last several months so we are watching that as well.
Rice Up 3 and quiet. Tomorrows export
numbers will be low but that is to be expected.
Natural Gas A little higher today as this
market looks for a low. We want to own this one for Mid-August and
September.
Cattle Down 65 and nothing to say that is new.
Sideways and looking for direction.
Dow Up 68 after the 226 point loss yesterday.
The next few days will be interesting.
Cotton Up 14 and we could rally more from here
as the market runs back to find resistance.
Tuesday July 24th-
Corn A quiet day after the crop conditions
report. Market is poised to move lower to rest support but the
current market location and fundamentals says a sharp break is not
likely and if it happens, it won't last long. Weather remains
favorable but there is a long way to go still. A large rally will
require the beans taking flight and working higher. The weather
doesn't favor that either.
Wheat New contract highs for wheat. We
will sell the final 20% on this move but will give it some time to see
if this breakout is good or a fake out.
Beans Quiet day here as well. Nothing to
talk about so look for more downside tests in the next few days.
Rice A little higher after being lower earlier
in the day. We are up 9 here overnight but that is only on one
trade and in November only.
Natural Gas Another down day as Gas collapses
and washes out all the spec longs. Commercials are buying this
break but there is no sign of a low yet.
Cattle Up a little just like yesterday
and I still have nothing to say as he
market awaits more news.
Dow Down 226 today as the market finally
collapsed. Technically, the move into new highs now looks like a
bull trap. A close under 13,590 is a sell signal.
Cotton As I suggested last night, the market
is rallying to find overhead resistance. Up 110 and it could move
higher over the near term.
Monday July 23rd-
Corn Quite a day today as the market sees
nothing but huge yields. As I type this the markets are all up in the
overnight based on crop conditions. Didnt we say here to expect the
yields to drop over the end of July?? Yes we did based on historical
evidence. Sure enough, the trade expected conditions to be higher but
they werent and now we have everyones attention. Do not be a big
seller down here. Yes I think the yield will be big but its July and
the marker can rally big in August. Not saying it will but it is too
early to take the entire weather premium out of the corn price. We will
sell a rally.
Wheat Holding up under the collapse in
grains. Is here another push for the highs?? Could be but the selling
up there has been more than enough to take care of the buying. Maybe he
hid time is he charm.
Beans Marker was sharply lower today on
weather. It is going to overdo to the downside.
Rice We broke hard today but rallied off the
lows. I dont see it going anywhere right now.
Natural Gas Big break today on ideas that cool
weather will keep usage down. No sign of a low yet as the tropics cool
off again.
Cattle Up a little. Nothing to say as he
market awaits more news.
Dow After the break on Friday the market made
some of it back. A very strong market still but anything is possible.
Cotton Nothing today but it did close near the
high. We could rally back t find overhead resistance.
Sunday July 22nd-
General Comments On Friday the
noon weather forecasts completely flipped and the corn and bean market
broke. Here on Sunday night, there has been no change in the
forecast and the markets are lower again with corn down 4 and beans down
11 to 13. Wheat is up and rice is down 3 cents.
There is no change in our advice...we want to sell a rally and
believe it or not we still think there is one to come in both the corn
and beans. $3.20 is our target for December corn right now and
that should be support. It could drop down to $3.15 but in any
event, this level should stop the break for now just because there is
still a chance for the need of weather premium; however, the size of
this crop is going to be incredible if things stay as they are.
Tomorrow crop condition should show the crop getting a little worse
although it still is above average condition for this time of year.
We will not sell anything at this level as longer term there is too much
support. In beans, the August time frame looks to start good so
the market is selling off as well but there will be another bounce here
as the fundamentals just don't support a price this low. Yes there
is plenty of beans right now but the crop size will be small enough that
once the supply side ends, the market should have a very strong demand
phase and that is what we are waiting to trade.
Wheat Still looks Topy and that is why we will
hold 80% sold and if you put a gun to my head I would be short. I
am not trading this right now.
Rice Nothing to add to last
weeks comments...read them.
Natural Gas With
the heat gone so is the bounce in natural gas. Support is right
here at $6.20 in the August but the supply is going to be very
burdensome. Even so, a Gulf storm will right this boat in a heart
beat.
Crude Oil A hook reversal down
on Friday and a lower start here on Sunday night may be indicating a
short term top in crude.
Cattle Holding and looking
like it wants to work sideways. Anything can happen here but not
for a lot in etiher direction. I still like the long side in the
field.
Dow Down 149 as the
market test support. No sign of a top but it could happen anytime.
Cotton -
Down 189 on Friday. Read our comments as we have been pretty dean
right on this one. Again, I don';t say this to brag I say it to
affirm our ideas of the markets conditions. It is doing as we
think it should so it says our analysis approach is correct for now.
That gives us confidence to trade it.
Thursday July 19th-
Corn Down 6 on good rains across
Chicago and the Mid-west. It is real hard for those guys to be
buying corn on dry weather when it its raining, cool, and fog around
Lake Michigan. Tomorrow, they won't have that and if today is any
indication, the selling may not be as steady.
There are so many ways to describe a day like today but I guess to
keep it a family show, today was a war between the bulls and bears.
The bears kept saying, "but look outside" and the bulls kept saying, "
but wait till next week." In general the beans should go higher,
as we have been talking about in our comments. The spread we
mentioned Tuesday is out to $5.45 between beans and corn and I can see
it out to $6.00 which is bullish as heck for beans if December corn is
going to hold around the $3.50 level. With that said, the corn is going
to be able to rally with the beans near term especially if a major
weather scare can occur with the beans. JUST REMEMBER...We will
sell this rally and then buy back corn after we get the final Supply
Side bear break because then we will enter the Demand Phase of the
market and that is where the bullish move will establish itself.
Wheat A hook reversal down after getting
very close to the contract high. If there is selling tomorrow, the
wheat could test support again. We remain 80% sold and will play
with the last 20% for a while longer.
Beans Up 5 after
being lower on the day by 15 cents. I actual bought beans today as
conditions look ripe for the bean/corn spread to work as I mentioned in
the corn comments. The market did do a key reversal up today and
closed over yesterday's high. With the weather forecasts for hot
and dry next week, the market could work higher but a lot of people got
burned last weekend when the forecast changed. Will if change this
time?? Well it could but I certain like the changes occurring
elsewhere in the upper atmosphere and that could signal that indeed a
change (for the better here in Texas I hope) is about to take place.
This would allow for more of the ridging to come back over to the east
and what could happen next Monday is instead of the forecast flipping to
too wet, they actually double up on the heat. It will be
interesting to see what traders do going into this weekend for sure.
Rice Yesterday I said this..."I look for another push lower until we
exhaust this selling. Problem is that when we exhaust it...there
won't be any." We call it "air" on the floor. It is when
someone or group is the only sellers and then they stop selling and
someone comes into buy. They can't find sellers so the market goes
straight up trying to find just where the heck they are. That
happened today with rice up over 30 at one time and finishing up 26 in
November. Now what??? Well we found the sellers problem is it now
makes the chart look like a bear trap took place.
All I can say is read our comments from Tuesday
night. The fundamentals are what they are and the fact that the
commercials can afford to sit back and let the market come to them only
messes with the time table of the higher move, not the fact that there
will be one. If there isn't, I see less acres next year and an
extreme bullish situation but again, that is in the future not July of
2007.
Natural Gas Massive
key reversal up yesterday with follow through today after the injection
number came in on target. I liked today as the bull/'bear war
raged and it looked like the bears could win mid-day after they sold the
market off and almost got it down on the day. The bulls were too
strong at that point as the selling from major commercials just wasn't
there and the funds had to cover. They have a bunch to cover and
from what I am seeing in the tropics, it will be early next week when
all eye start looking at a storm. From what I can see it will not
be in the Gulf but that won't matter because it will be "there" and that
is enough to get the shorts to start covering and taking profits.
Look at the rice chart today. That could be gas if everyone heads
for the exits at the same time.
Crude Oil Up 89 with $80.00 on
their mind. PB is 79.5% so it will be interesting it we can keep a
straight line in this one.
Cattle Down 87 with pretty
much a lower move all day long. Feeders weren't off but 2 so there
is nothing here to really hang our hats on. We will keep watching
but no sell signals yet.
Dow Up 80 with no
sign of a top. PB is just 54% so it has room to roam.
Cotton -
Today killed any chance for an expansion phase in cotton. I
didn't think it would happen as I explained on Tuesday. Just too
many days in a row extremely overbought.
The market finished right on its 21 day moving average and it did
close that gap we told you about. We could retrace some of this
break sine we have down these two things; however, we don't need to and
support is still 4 cents away at $60.00. I am still not trading
it.
Wednesday July 18th-
Corn Market a little higher today
with corn up 5. Read our comments from the last two days as that
pretty well sums it up. Look for a bounce over the next four weeks
and we will sell it.
Wheat Up 25 as wheat continues to look at its
own situation instead of corn and beans. We remain 80% sold and
will wait to see what the market does as it approaches its contract high
which is just 15 cents away. The issue is the heat in Canada at
this point. It will hurt the crop there but just how much??
Also at question is the rest of the wheat harvest in parts of Oklahoma
and Kansas.
Technically the market can make a run higher and into new highs but
odds favor an extreme over bought condition to occur and then a major
break. So we will sell our final 20% if conditions warrant.
Beans Up 14 to 16
today as beans came back. Heat is forecast into the bean area
after this rain which moving through the area. Also, there is
little to no rain in the forecast for the next 10 days in a large part
of the bean areas and heat will be a factor. The question is how
long does it hold. With conditions changing in the Gulf of Mexico
that could signal the end of a steady stream of moisture into the
Midwest. In general, I see beans headed back higher based on not
just the weather scare itself but also the demand picture given the
lower supply to begin with. We will sell the bounce here and hope
it gives us plenty to make the call.
Rice The market didn't rally
today and in fact there seemed to be a steady stream of selling with the
buyers backing up again. I look for another push lower until we
exhaust this selling. Problem is that when we exhaust it...there
won't be any. Technically, the market looks like it can sell off
another 30 cents.
Natural Gas Massive
key reversal up today. We are buying gas here as the technical
picture and the fundamentals are turning toward ownership at this level.
Crude Oil We have been saying
for some time that $75.00 looks probable and today that occurred.
Can it hit $80.00?? You bet but it will be a stretch. We are
now looking for a place to sell.
Cattle Up 60 today in Fats and
still in sight of the $100.00 mark.
Dow Down 53 today
but it was off over 120 at one point. No sin of a top here either.
Cotton -
Up 65 as the market starts to retrace. Is this the top???
Not sure but read last night as we talk about an expansion move.
It still is possible.
Tuesday July 17th-
Corn More downside pressure today
as the market reacts to rain moving into the Mid-west and more is on the
way this Thursday and Friday. Down 11 today with the market off 17
at one time. The downside risk from here is not that great so if
you haven't gotten to our 50% sold level...we wouldn't sell anymore
right now. Down side risk from here is now huge based on technical
analysis but the timing is all wrong. We now have a downside
potential of $2.75 in December and that is not at all out of the
question. What is out of the question is a move to that level
before the crop is past the weather scare point.
In 1998, the crop condition as of this point was 66/11 (good to
excellent/poor to very poor) and yesterday the number was 64/12.
The final number in 1998 was 30/36. During a normal year, the
number yesterday should have been 70/10 based on where it started.
With the rains, the crop condition should stop deteriorating...lets see,
in 12 years from the 3rd report in July to the 1st report in August,
that has happened...3 times and on average a whole 2 points with the
poor to very poor not improving at all.
The bottom line is this...it is hard to watch the price fall and the
market is looking at a huge change in the expected carryover from what
we were talking about 4 months ago; however, there is still no room for
a mistake and once we catch support, we should get another bounce based
on something...what I can't say but it could be the beans.
With that said, make sure you read our bean report tonight.
Wheat Unchanged after holding up all day.
Nothing new to report here. The market will move back and forth a
lot near term as it tries to figure its fundamental situation out.
Beans Down 38
tonight as beans fell through the low they made after the NASS acreage
report. The massive selling was in part due to the over bought
conditions of late and the huge rain forecasts. As I wrote last
night...Strike One in the beans.
When the NASS acreage report came out on
June 29th, soybeans were trading at a $4.84 cent premium to corn.
That became $5.80 last Friday. One dollar in 2 weeks. Now we
have taken almost 60 cents out of it in 2 days as tonight the spread is
at $5.23.
We could see under $5.00 in the spread but
with the weather situation as it is and the crops where they are, I
doubt it stays there very long. Remember, the corn is much further
along in maturity than beans and we have 2 weeks before we go into their
main vulnerable growth situation. So in beans, we still see only
strike one and once this rain is through, the market will deal with more
heat and a rally is more likely. We will add to sales but not down
here, not like this, and not on your life...
Rice Last night..."the market is vulnerable to a
'stop collapse' from here. What I am referring to is the 10.60
level where a triple bottom has formed and if we take that out, we could
see a massive amount of stops propel the market sharply lower."
As we warned, the market broke through the 10.60
level and finished on the lows down The market is at the
lowest price since January 8th closing at $10.49. There is a gap
at $10.45 but it is such a weak volume gap it means nothing. What
does mean something in this market??? Two things...
1) The market was lower today based on
speculative selling and that means new shorts... is that true??
Well we will know in the morning. If it is new shorts then the
commercials will be on the buy side. They are pulling back and
letting the market come to them as right now, there is plenty of rice.
The thing they had and have to be worried about is "who will sell them
rice down here if they want to cash in their chips on this move lower?"
If the funds have started to short the market, then the selling is here
and the commercials will let them have it on scaled down buying.
Now the good news for producers...the funds will not sell forever and
when they come out...it will be into nothing but air. In the mean
time, the market can still work lower until the selling is exhausted.
PB is 25% tonight we we are not far in time from that situation but it
still could be 20 cents lower first.
2) The fundamentals do no support this price.
This is a "truth is in the eye of the beholder" type statement but let
me start by saying, this is why I am not a
fundamentalist. Fundamentals do not always support the price and
in fact, rice is a perfect example of a market that will exceed its
fundamental picture in either direction. Yes, the market is wrong
and it is wrong a lot...ask anyone who bought cotton over the last 6
days!!! Are rice futures manipulated?? Yes to some degree
but there is always a snap back when it gets too far out of balance.
So manipulation is for short periods of time and in most of the
situations where it has happened, it is done by the lack of commercial
involvement more than as a result of commercial involvement. Right
now, the commercials are not aggressively buying a market that is under
priced by all historical data. With that the case, looking at the
last 5 years, we have made lows in July as late as July 26th but most of
them have been earlier like July 7th to 14th. I will talk more
about this later but there is some research that needs to be down before
I can give you specifics. The key is this, at the current price of
rice, are you making the amount of money you would make if you planted
something else. With Beans at $8.50...Corn at $3.80 (new crop),
Wheat well over $5.00??? What will you do next year??
Yes we can go lower near term but all in all, the
market is not likely to stay down here very long...it is just if you
have the pocket book depth to get through the out of balance condition.
I will remain 33% long and when I see anything looking like selling
exhaustion...I'm buying more.
Natural Gas Just as
the grains. The market moved lower on weather changes but it
didn't change very much. PB is Gas is at 25% so it has room to
test $6.00. The question is does it have time???
Crude Oil Down just a little
with a slight hook down but I will not call it that. Still enough
push to climb over $75.00
Cattle More upside today on
feed costs being lower. No sign of a top here just like no sign of
a low in corn.
Dow Up 21 and still
walking on...no sign of a top here.
Cotton -
Here is why we didn't want to buy cotton...down 215 points after the
hook reversal last night. Anyone buying cotton the last 6 days has
a loser tonight. PB has dropped from 93% to 72% tonight.
That was in one day. Now what??
Cotton could go into expansion. This
is where the market corrects from a major over bought condition and then
turns back higher and continues on up even making new highs. The
problem is I can't tell you if that is what we have here or not.
64.90 closes a gap and $64.10 is the main support line of the up trend
(this is an indicator not a trend line.) Tomorrow will be one of a
few days here that tells us what will happen and things could get very
volatile. If we turn and run back higher and move over
67.40...odds increase of an expansion market; however, the length at
which cotton has been in an extreme overbought condition, lowers the
odds of an expansion market from this level.
I AM STAYING CLEAR!!!
Monday July 16th-
Corn So much for a "powerful heat
dome". As I wrote last week, I wanted to sell this bounce
and not get all caught up in the weather thing but I at least thought we
would get the chance to catch the rally. No one saw this coming as
ALL the models missed what was going to happen in the 18-20th time frame
and when they missed it they decided to miss it BIG!!!
Market limit down locked with 33,000 contracts offered limit down at
the close. Synthetic options are trading down another 3-4 cents
for tonight's opening of the overnight session. If the forecasts
stay on their current track and that is a big IF...then we may see more
pressure into the mid-week time frame and then a stabilizing. But
this strike two and now any rally must be sold with options available if
we get into a 1998 situation. Odds do not favor that and in fact,
odds favor a move on down to $3.00 in December with a carryover near 1.7
billion bushels assuming about a 152 bu/acre yield. We
chose to get to 50% tonight especially if you can use futures later.
Any rally will need to be sold and I think we will have one more swing
in the market especially with the beans in their situation. We
cannot afford another weekend weather change like this one if we get
another bounce.
Look for conditions tonight to be worse and the averages predict a
70/10 and we already know the conditions will be worse than that level.
We were at 70/9 last week.
One more thing....do not lose the big picture. This is not a
one year situation as the market must keep a supply of corn feeding the
demand. Next year, I expect a few farmers and I say that with
tongue in cheek, a few farmers to move back into beans. That fear
in itself will keep corn from heading back to 2006 price levels.
Around $3.00 we will be buyers and believe the market will be in the
lower portion of its range assuming we don't have more than a 1.9
billion bushel carryover.
Wheat Down 17 with the collapse of the corn
and beans. Nothing new for us as the market looks to have made a
top for now and could look for support. We are 80% sold.
Beans On Friday
they couldn't find sellers to keep the market down and today it was
nothing but sellers. Limit down with 18,000 contracts offered
there in the November. The synthetics are trading 4 cents lower
here as well so that is where we may start tonight but I kind of think
even lower to be honest. Anyway, this break will be well supported
and soon. There are some huge longs here but from the chart, we
can see support at $8.80 and this crop is long from made so we still
have the August heat to deal with. We would say today maybe strike
one in the beans.
Rice Rice does not make a "V"
bottom. This looks interesting but the market is vulnerable to a
"stop collapse" from here. What I am referring to is the 10.60
level where a triple bottom has formed and if we take that out, we could
see a massive amount of stops propel the market sharply lower.
With the outside markets not giving support and a large supply of 2006
rice still available, the longs are not pushing the market and still
believe they can get any inventory they want near term.
We are 33% long on buy backs and looking to hold cash rice at the start
of the year.
On the longer term we are back to where we were in
May believing that the move in Rice was still a few months away.
If it takes its cue from corn...October is more correct. I doubt
it takes its cue from corn so it could be spring before we see the
advance to price in the 15 million cwts plus carryover in long-grain.
In that time a lot can happen and may as the trade in rice wants
everyone in the chain to be at a profit except the farmer. Be
careful and be safe in this one.
Natural Gas Just
like the grains, the rally last week was solely dependent on heat
and they have taken that away so the market is off today 25 cents;
however, it is the wrong time of year to push this market lower so the
downside risk is minimal.
Crude Oil Up 27 cents with
unleaded and heating oil continuing their sell off. Unleaded is
down to 2.13 and and a nickel from major support. I still see $75
but not trading for it now.
Cattle Unchanged in fats with
feeders very strong with the corn limit down. As I said last
week...still don't see much risk here.
Dow Up 51 and odds
of a bull trap are fading. Looks like the breakout signals another
leg up but we should get a test of the break out in the next few days.
Cotton -
Down 63 in a controlled sell off. Today was a hook reversal down
but it didn't phase the PB as it climes again to now stand at 93%...an
all time high!!! If we get follow through selling
tomorrow...things could get crazy.
Sunday July 16th-
Well, it was dependent on the weather over this weekend
and the forecasts have all changed and changed BIG!!! As I type
this just before 8 PM on Sunday night, Corn is down 17 cents, beans down
33, wheat off 15 and rice hasn't traded. Natural gas is down 16
with crude up 3. What gives?? Remember that heat dome we
talked about...it is not in the forecast any longer and the markets are
retracing. For corn, this may be the last hurrah but it is
definitely...STRIKE TWO.
So now what??
In corn, we need more protection and hate that on
Friday the forecasts said one thing and here on Sunday night they say
something else. Obviously, the closer we get to the time frame the
better the odds are that the weather models will be right so I am
answering the question I asked as soon as I saw this, "is this forecast
right??" I will wait for more information. I mean the limit
is 20 cents and we are down 17 so let's let it trade a bit. In
beans, this forecast change is on top of an overbought condition
which I mentioned during the Webinar. Frankly, I like owning beans
down 30 tonight so...what the heck!!! Wheat, is in trouble.
I hope everyone is at 80% as we have suggested.
Rice is not affected by this but let me stress
again, the carryover for rice DID go up on ALL rice but in the long
grains category, the rice carryover went down. I would buy another
break here as the fundamentals are not near as bearish as I expected
give the NASS acreage report.
Natural gas is lower tonight as well
because of the lack of heat but t dominate return of the Bermuda high is
indicating the tropics are not far from being ideal for a storm and that
will not let Natural Gas sink very far.
Cotton is still way overbought and should correct
very soon. Its not that is it can't go higher its the fact that
the risk at this price is huge and at some point, the longs are going to
want to get out and then who will be buying it??? DO NOT BE SHORT
either.
I don't have any comments on anything else so lets see
how the market trades the rest of tonight...I'll have comments in the
morning.
Thursday July 12th-
Corn A heat dome is now a big part
of the forecast and even thought the report this morning was bearish,
the market reversed and moved sharply higher based on the new threat to
supply.
Using the 3rd crop condition report of the month which is next week
and going back 12 years, we can see 5 out of those years with double
digit declines in crop condition. Again, I am in no way
forecasting that, I just want everyone to realize this crop is not made.
To back that up even further, only 2 out of those 12 years did the crop
condition go up. Maybe that is why USDA chose not to raise the
yield.
On the other side, the report shows that of the other 7 years not
having dramatic declines, the average drop was only 2 points. That
is why we are still wanting to sell this rally but will be extremely
patient and allow the market to see where it can go. This heat
dome needs to really catch hold to do damage to the crop and at this
point, that is what we be looking for is real damage.
Technically, the market has resistance at $3.73 in December and then
$3.85. Beans can drag them higher as well but near term, we could
see the market test these levels and we will have to watch the weather
to signal the end of this bounce and where we want to sell more.
One more thing...the USDA report this morning did not change the
yield per acre. If we are going to add another 5 bushels to the
yield, the carry over would get very close to 2 billion bushels and that
would support $3.00 corn so be careful. If you are trading it
long, consider selling covered calls to minimize some of your risk.
Wheat The report was bullish and we responded
horribly. We will say again....be 80% sold in wheat. I'm
looking to short it here but will use an option strategy or trade
very...very...VERY small.
Beans As I said
last night, we are headed for $9.50 in November and if the this heat
dome catches hold...LOOK OUT!!!! "BEANS IN THE TEENS" will
again be the cry. Do not be short futures if you are speculating
as there is little selling right now.
Rice What the heck!!! We
called rice 10-15 higher this morning and it actually opened lower.
We took the gift and bought back in to our 33% long position and were
able to move to November in the process. Today was a massive key
reversal up closing 14 higher but we need more up tomorrow. Follow
through on a key reversal up is extremely important.
Natural Gas A huge
injection and the market collapsed. Then is started back higher.
This dome of pr4essure will bring in the heat and it will slow down some
of the selling so we bought Gas today and if we can trade over 6.60
tomorrow we will be buying more and a move over 6.85 and we will be
buying even more for a run to $7.25. It may take a tropical event
for that to happen but hey...its July 12th and we are headed into the
heart of season.
Crude Oil Basically unchanged
today with $75 still a likely target. Unleaded was sharply lower
today. Heating oil put in a key reversal down but just barely.
Cattle Down 15 and watching
the grains. The market started higher based on the grain report
but the weather spooked some of the longs and selling rolled in.
We see limited downside here.
Dow Up 231 points
and into all time record highs as I type this. It will take a few
days to determine if a bull trap could be in the process of being
formed. Odds DO NOT favor it but it is worth watching out for.
A move under today's low would signal that if it occurred over the next
5 days.
Cotton -
I showed on the Webinar this morning that there is an extreme
overbought condition. There was nothing new today from the report
and the market finished up 13. Nothing new. We would have no
positions right here.
Wednesday July 11th-
General Comment No reason for a
major update tonight in anything as tomorrow's report will tell the
tale. We will have full details on the Webinar in the morning.
Tuesday July 10th-
Corn 7 cents higher today after
being lower overnight. The market rallied strongly right out of
the shoot after crop conditions were lowered (as we expected and
predicted) along with more dry forecasts. Shorts who think this
crop is made will not be running for cover because of today's gains so
it will take more bullish news to push us dramatically higher and
Thursday's crop report will be key as well. With that said, have
you signed up for the Webinar this Thursday??? These numbers will
have an impact on the market near term. Our position is long to
get short. We want to sell this rally and sell it big expecting a
big break in corn as long as the weather looks like a 150 to 155 bushel
yield is possible.
Wheat Up 3 but 7 off the high and not looking
so good. I still see the market pushing lower near term to test
major support. That could mean a 20 to 30 cent drop but again, I'm
not trading for it as longer term the supply conditions do not favor a
major break...at least not yet.
Beans Up 18 today
and still looking like it could go to $9.50 in the November. We
are long in the beans with only 25-33% sold as of now and still
comfortable near term. If dry weather catches hold, look out as
beans could do the exploding that we thought corn might do this year.
Rice OK...its time to move to
the edge of your seat in rice. The November is now 10 cents away
from major support. We will test this level for the first time
since the NASS debacle in acres occurred. If $10.60 does not hold.
$10.40 to $10.20 becomes possible. The USDA report will have a lot
to do with the near term direction. Today's action was speculative
and technical selling but there were no aggressive buyers as the sat
back and let the market come to them. This could be case tomorrow
as well as we test this major level of support.
Natural Gas As we
said last night we are buying it lightly and today's rally may setup a
move back to $7.00 in August. We would stay long for now and lets
see what happens weather wise. PB tonight is still at only 24% so
there is a lot of room to the upside.
Crude Oil Up 46 cents as crude
holds. PB is at 66% so again there is room for the market to move
higher. Nothing has changed as $75.00 is in sight.
Cattle Down 73 today on the
rally in corn. The market is well balanced and can still work
higher. We will see if this profit taking day changes things any.
Dow Down hard today
as the Dow sold off 148 points. Is this the sign that a triple top
has formed. We are not ready for that but as you know, we have
been warning that it is possible. If we sell off hard
tomorrow...things have changed and we will look at getting short.
Cotton -
Let me be clear here and I apologize for any misunderstanding.
Some of you have been long December cotton futures and last night my
comments were to those who were in the market long. I would exit
now. If you are not in the market, I would stay out. I do
not like picking tops and the computer will signal when that time is
right. AT this moment, PB is 90.7%...that is almost unheard of in
cotton. If you wanted to take a shot at a major top here...buying
a Put is the most logical but I don't like options in cotton as the
market is too thin.
If you want to get long...there is coming
a better price opportunity then tonight's close. Be patient as the
risk level is very high here in cotton...in either direction.
Also, don't forget to get a good look at the USDA report this week.
Will it support 67 cent cotton??? We will see...
Monday July 9th-
Corn Read our Friday comments.
We forecast crop conditions to fall this week based on historical data
and even made a forecast of a 72/9 ratio based on Good to Excellent
verses Poor to Very Poor. It came in at 70/9 falling 3 points up
front and gained a point on the downside. Our point was and still
is, the crop conditions will worsen and this crop is not made.
Even so, we are looking to sell a rally here and if we can get a second
bull weather market going, this time we will be very aggressive sellers.
For now, we hold to the fact that averages and history says a bounce
form this level over the next 4 weeks and then...well, we'll watch the
crop conditions and see. As we said Friday. the market should be
able to hold near $3.50 to $3.60 over the next few months on an average
so we will be selling higher than $3.60.
Wheat The sell off today could signal the end
to the bounce. Again...we would get to 80% if not there. We
will play with 20% but that is all.
Beans Higher again
but there is selling here. Crop condition did get worse this past
week but not by much. We will be looking at the tendencies here
this week.
Rice Unchanged but off the
lows. Not much interest in trading here at all. The USDA
report this week will be the focal point as we see demand numbers given
the higher supply of rice.
Natural Gas Down 3
and testing support again...we are buying here but very lightly.
Crude Oil Down 65 but it still
doesn't look like this run is over. Tomorrow will be key to this
weeks action.
Cattle Higher and off lows.
Cash seems firm and that should support. Near term chart indicates
overbought condition so a check of the support line could be coming.
Dow Up 38 and still
below the highs...triple top should be watched for.
Cotton -
Sharply higher...up 192 and yes, the computer is still yelling...SELL
FUTURES...not cash.
Friday July 6th- it may have been short last
night but it is a BOOK tonight!!!
Corn OK...here we go. Market
up 9 cents today on ideas market is oversold and crop condition may be
worsening in certain areas of the con belt. Imagine that!!!
Today our office got down to the nitty-gritty and did our homework on
crop condition reports for the past 12 years and took a hard look at
what the forecasted final crop condition report will say and what the
yield will be based on that so....sit back and let's look at the
projections. First, a disclaimer....past weather performance is no
guarantee of the future crop condition report but there certainly is a
tendency.
Is the corn crop made??? NOT HARDLY!!! According
to the last 12 years, from the 1st crop condition report in July until
the final October corn crop condition report, history says the Good to
Excellent category, from now on referred to as GEX, has dropped on
average 12 points while the Poor to Very Poor, referred to as PVP, has
risen 8 points. That would indicated a final crop condition
report, using the averages, of 61 GEX and 16 PVP. We write that
61/16. That compares to the July 2nd crop condition report this
past Monday of 73/8.
Stay with me...reread it a couple of times if you need to. Now
if I throw out the outliers (the low and high percentage changes during
that time) the forecast would change from a 61/16 to a 62/14. That
would indicate that the current condition cannot possibly hold up.
In fact to give more credence to this. At no time since 1994 has
the PVP number failed to go higher from the 1st of July to the October
final crop condition report. In only 2 out of the last 12
years has the GEX not dropped. The highest decline was in 1998
when the crop dropped in the GEX 36% from 66% down to 30% by years end.
In 2003, the drop was 23% with 17% of that decline coming after
August 1st. Here is another interesting point (and I have
many); only one time in the last 12 years has the condition of the crop
not deteriorated from the 1st report in July to the third report in the
month of July. That would be for the report on July 16th this year
so it will not be long before we see if it become 12 out of 13 years.
So with all of this said, does that mean we can bank on a final 61/16
crop condition at harvest??? Of course not...it only shows that
the crop has a definite tendency to deteriorate from this time of the
year into the harvest. It certainly doesn't have to but , read
this carefully, no crop year with a rating of over 70% on July 1st
(there were four) ended with anything higher than a 64% GEX number.
The only year we ended with a GEX over 70% was in 2004 when we had the
all-time record yield of 160 bu/acre and in that year, the July 1st
rating was 68/7 and get this, that year we finished at 73/8 so even
then, the PVP went higher after the July 1st time period.
I hope this all makes a little sense as to why we hold very firm in
the idea that the market is oversold here and should make a come back
based on historic results. Time will tell if we are right and we
will stick this someplace on the website to refer back to every once in
awhile. The next two weeks will be interesting and our forecasted
crop condition report, strictly based on averages, is 72/9 this coming
Monday and 70/10 for July 16th...Man I love this stuff!!!
One more thing, a 61/16 would indicate a yield of 152 bu/acre.
Plugging that into our formula sets out a carryover of 1.37 billion and
a stocks-to-use ratio of 11%. That compares to a
7% number in the last Supply and Demand table. Average price
should be near $3.30 to $3.40 and December futures...$3.50 to $3.60.
Today's close...$3.51. Bottom line...we will not be selling below
$3.60 until we see the crop size much clearer than we do today.
It will be interesting to see where the USDA come in on Thursday's
S&D report. We will have it here Thursday morning so
sign-up now.
Wheat Up 6 and closing near highs. We
can still see this a bit higher but a word of caution. That key
reversal down last week is huge. We would get to 80% sold ASAP and
we will play with the final 20%.
Beans Up 7 in
another "open higher and sit" type day. We still see it higher and
by the way, the same exercise we did on the corn crop condition
report...we will do on beans this next week. $9.25 to $9.50
Rice The only thing not higher
today as we finish off 2 cents. The USDA numbers will shed some
light on things but maybe the market is telling us it doesn't believe
the numbers NASS is putting out either.
Natural Gas The
injection number was bullish but the idea of less heat and no weather
problems sent us into lower levels again today.
PB tonight is at 18% so we took on the
first level of a base position which is 10% for the energy market.
This is a spec buy and we did going into the close. We will buy
more at $6.30 and then more at $6.20. Can September get under
$6.00....sure but what a deal that will be. With crude pushing all
the right buttons on energy, the market is way oversold and the short
fund positions will be fuel for the fire when the time comes to reverse.
Look for more tropical activity this time next week. Remember, we
are not behind the curve on when tropical storms form as few are names
before July 15th.
Crude Oil Another strong close
as Nigeria is more and more a problem. The solution over there
will be hard fought and who knows when it will end. I see $75 in
September.
Cattle Strong day today.
October up 157 and feeders exploded 232 points higher. Nothing new
from us. Still see it firm but back and forth is very likely.
Dow Up 48 as we
head for a triple top. Going to be interesting.
Cotton -
Up 76. PB is at 87% now and an exhaustion gap is screaming
sell it. I had a trailing stop on the market if it went down on
the day but that didn't happen. I don't like to stand in front of
freight trains and news that a major firm has recommended buying
everything...including cotton, may have fueled it higher today. I
look for a correction and VERY SOON!!!
Thursday July 5th- Short evening update due to
computer problems
Corn Up 4 in a quiet session.
Market put in high and low in first 15 minutes. Market may pause
here and wait for any weather development.
Wheat Up 20 as market looks at demand.
More corrective bounce is possible but we are still over 40 cents off
the high.
Beans Up 4 in
consolidation. Higher ahead...
Rice Up 8 in technical bounce.
Natural Gas Just a
bit lower as the market settles into a quiet trade as well.
Crude Oil All over the place
today but a good close.
Cattle Nothing new...sideways
with the feed grains as the main focal point.
Dow Down 11 and
quiet here as well.
Cotton -
Up 42...technical picture still says sell long futures...not
necessarily in the cash.
Tuesday July 3rd-
Corn Another hard day down as
weather and the worries that carryover is headed for 1.7 billion bushels
weighs on the market. Are traders right in their forecast???
Yes and no. Read our comments from last night...that is important
to understand the following data. In 2004 when all was said and
done (October 1st), the crop rating was 73/8. That is 73% good to
excellent and only 8% poor to very poor. Monday's condition report
was 73/7 which is the best on record going back and including 1995.
If this crop keeps on its current pace, that would possibly forecast a
yield of 160 bushels to the acre which was the record of 2004. If
we assume the same demand as in the last WASDE report, then we would not
have a 1.7 billion bushel carryover like traders are talking about today
but a 2.1 billion bushel carry over. Again, this assumes the crop
condition ratio holds at 73/7 which would be the best in 13 years.
If I drop the yield to 155 bushels that is closest to 2006 which had
a yield of 151.2 bu/acre and a crop condition of 61/15 at harvest.
Something big is going to be needed to drop the crop condition that
much. So the question is, can something that big happen??
Yes and there is history to prove it has. We will talk more about
this on Thursday and have some more data for you to chew on then.
In any event, the market is correctly moving lower to price in a 1.7
billion or more carryover. I think that number is somewhere around
$2.80 in December but I doubt that can happen until late September
because things can go very wrong very quickly as we in South Texas can
attest to.
Wheat Down 1/2 to up 4 in the July.
Dead cat bounce is likely from here as the selling seems to have dried
up for the moment. We are now 80% sold and if you are not
there...we will hope for a bounce so you can get caught up. The
20% we will store for basis and the longer term picture.
Beans Down 16 on
good crop condition reports. Weather is also a negative but the
carryover number is going to be so low, where is this one going.
It is a buy on a break. $8.80 was the support zone today and under
that, a move down to $8.65 is possible and I will be buying it there.
Do not be selling yet.
Rice 10 lower again today as
the market looks to be testing major support at 10.60 in the November.
That is another 24 cents down from here. Read our comments from
the last two days as that pretty well spells it out. .
Natural Gas The
market consolidated the rally from yesterday and we have our first
possible hurricane target in the Atlantic. It is way out there but
it reminds traders that storm damage is a real threat and there should
be some weather premium added. Yes, a bounce should be sold unless
we see the threat as significant for the gulf gas fields.
Crude Oil Up 30 today and
still looking ok to run higher.
Cattle 22 higher in a quiet
session.
Dow Up 41. Anyone
for a triple top??? I wouldn't be a bit surprised.
Cotton -
Up 2 as I type this. Read our comments from last night. If
you are long futures we would get out NOW!!! If you are long cash,
there still are government supports at this level. There may not
be after congress gets through with us this year but that again is for
next year and not the crop you are growing. So this is still for
futures traders...GET OUT NOW!!!
Monday July 2nd-
Corn After the higher move
overnight the market was poised to start a corrective bounce but again
the selling rolled in as weather forecasts are not supportive and the
planted acreage number is still weighing on the market. Now that
bounce could come at anytime but again, if it is only a profit taking
bounce we will come right back down to this level or lower. What
we need is something to affect the supply side of the equation and that
is a weather issue. Otherwise, we are subject to another push
lower on a crop of over 13 billion bushels.
Tonight's crop condition report did not show the crop get any better
but it didn't get any worse either. Let's put this in perspective.
At the time of harvest last year the crop was rated 63/14 (Percent
Excellent & Good/ Poor and Very Poor). So in plain English you add
the excellent and good together and then compare it to the poor and very
poor from the conditions report. The 63/14 rating was as of Oct
23rd, 2006. Today's rating is 73/7. When you look at
last years yield of 149.1 bushels at a 63/14 rating, it makes only sense
to believe that the yield will be higher if the 73/7 rating holds to
harvest. If we assume a 155 bushel yield on 84 million acres
harvested, it is just over 13 billion bushels and adds 600 million to
the carryover. That would put it at 1.5 billion bushels compared
to 987 last year and 997 in the last USDA S&D report. The bottom
line remains, if you are bullish you had better ask why and what
is out there or looks to be out there that will cut the supply?
Next weeks (July12) reports will tell the tale and right now, I do not
want to be long given the current situation.
Over the next few days I expect some type of a bounce and we will be
adding to sales; however, longer term, the market is still good and by
that I mean into late 2007 and early 2008. The demand picture is
not going to change but the supply for the next two years will be a
roller coaster so don't get too down about prices and where they may
head. So if you can store, you are ahead of the game.
One final thought. For you guys not in Texas you probably do
not know what is happening here but coming into last week, I would have
put the 2007 harvest of corn as one of the biggest we have ever seen.
Today, that yield is very much in doubt as it has rained everyday for
the past 10 days and that is behind 4 weeks of constant rain. To
make a long pitiful story short, we are losing yield big-time now as
Milo sprouts on the heads and corn is under tremendous pressure from
disease and ear worm damage. My thought is simple. It isn't
over until it's in the bin. There are a few south Texas grain
farmers who can attest to that tonight. Also, that change in
fortune is NOT in the crop condition report out today.
Wheat Down 14 today. Hopefully you
jumped when we said to over the weekend. I am assuming everyone
did and is now 80 - 100% sold. Here is what I wrote last Friday...
MASSIVE KEY REVERSAL DOWN... We
got to 80% sold today shortly after 11:30 when it became apparent that
wheat was putting in a major reversal on a bullish report. If you
didn't get it and I doubt many did, I would go ahead and sell the other
30% right now...over the weekend if you can. If you want to see if
there is a bounce that is cool but sell another 15% over the weekend and
then look for a volatility bounce early next week to get the other 15%
done. If you know what your yield is and can use futures, we would
get to 100% sold ASAP. Today's action is a killer and it was what
we were waiting for to do the final selling on. We can always come
back in and buy futures but today is screaming....SELL IT NOW!!!
Yes you can still get a bounce and in fact I am counting on it to get
more sold but the action between Friday and Today is just horrible and
now everyone is looking to try and get caught up on rallies.
Beans Read our
comments from Friday. We hit $9.00 today in November and there is
still no sign of a top here. We will hold off on selling anything
just yet.
Rice Read the Friday comments.
Especially about NASS. All I have heard from most states since the
report came out is "your kidding??" We will see what the certified
acres are but it is interesting to know that the NASS group doesn't
really care if they are off on acres because they can always come back
and change the yield. In any event, down 4-6 today and another 30
cents are at risk in the November.
Natural Gas $6.50
looks like good support and we are buying against it. We still see
more chances for storm impact later this summer and the traders have
taken all of the premium out of the market at this level. We want
to own it.
Crude Oil Up 66 cents today
and crossing the $71 mark. Still going.
Cattle Down 25 in quiet trade
watching feed grain prices no doubt.
Dow Up 126 with the
bonds rallying.
Cotton -
Up 17. If you are long GET OUT NOW!!!! PB is at 86% in
December and the market has an exhaustion gap from the report on Friday.
Let me say it again...GET OUT NOW!!!!
Friday June 29th-
Corn Where do I start??? The
bottom-line is that the NASS report is finally in and it showed a huge
increase in acres. Up 2.2 million which if we assume 91% will be
harvested, adds 300 million to the supply and that situation sent
the market sharply lower. If yield drops to 146.5 bu. acre from
the current 150 forecast, then the carryover number is the same as the
last S&D report even with the increase in acres. All of this to
say, it still isn't over; however, that big thing with a huge light
coming is not the end of the tunnel.
There is a lot to talk about tonight. For instance, a lower
price will increase demand as more ethanol can be produced when head to
head against $70.00 crude oil but...we are producing at capacity.
The weather forecasts are getting dryer for the Western corn belt but...
they are not near to any damaging conditions. China is having some
major weather problems but...we are months from them needing to buy corn
from the United States. All-in-all it comes down to yield and while that
is up in the air, it's not over but if we start to see a 155 bushel
yield on 84.5 million harvested acres, we will see the carry over jump
back up to 1.6 billion and that would indicated prices under $3.00.
Two years ago our carryover was 1.9 billion and the average farm price
was $2.00 so you can see at today's price of $3.55 we are still too high
if the carryover is going to jump.
It is hard to be pro farmer and understand how this could happen but
if we assume a $2.50 cent average corn price for this crop, how many
acres will we lose going into 2008??? The bottom line is we did it
to ourselves and while I still see a bounce over the next four to six
weeks...we need to be selling it like we sold wheat
today....aggressively.
Wheat MASSIVE KEY REVERSAL DOWN... We
got to 80% sold today shortly after 11:30 when it became apparent that
wheat was putting in a major reversal on a bullish report. If you
didn't get it and I doubt many did, I would go ahead and sell the other
30% right now...over the weekend if you can. If you want to see if
there is a bounce that is cool but sell another 15% over the weekend and
then look for a volatility bounce early next week to get the other 15%
done. If you know what your yield is and can use futures, we would
get to 100% sold ASAP. Today's action is a killer and it was what
we were waiting for to do the final selling on. We can always come
back in and buy futures but today is screaming....SELL IT NOW!!!
Beans Up 41 cents
with a wild day behind the action. At one time there were 30,000
contracts bid at limit up and then there were none. The fact we
closed away from limit up is not a good sign either. July had no
limit so one time it was up 68 cents only to finish up 41 which was 5
cents off the lows after the report...not too swift. Even so, we
remain with no additional sales (we are at 25-33%) believing this market
has $9.00 all over it in the November. We got $8.92 before the
limit up level stopped the advance. We will look at the market
next week but breaks here are going to be supported.
Rice Last night I said this
may be the new NASS...nope. It's the same old group with the same
old problems. They don't know what the heck they are doing when it
comes to rice and they use an archaic system when they have a
computerized system right in front of them. They refuse to check
acres by computer as they are reported in each state and look for trends
between farm numbers. A system that seems so much better logically
and accurately but no, they call some guys and say..."What are you
thinking about how many acres you planted?" As I have said many
times before the system "sucks" but hey, they have their jobs to
consider and if they changed to a new approach, they might lose theirs.
OK...off the soap box. Down 24 cents and yes I
was long but not that much. We have been keeping our powder dry
waiting for a breakout. We didn't get one today and there is
another 20 to 40 cent risk as the USDA just added 4 million cwt to the
supply of rice. As I said in the report analysis, they did lower
the Texas crop after being off consistently so I have no beef with them
on our acres here. In general, looks like we will be in that $4.00
level for quiet a while.
Natural Gas Market
bounced today after the big break yesterday but it may be a dead cat
bounce...or not!!! The key is the weather forecasts after July
4th. No sign of tropical action but again, it's not late as we
pointed out earlier this week. As of now we have had 1 more named
storm than the record year of 2005 as of this time.
Crude Oil Up 80 cents and
closing over $70.00. It is going to get worse!!!
Cattle Up 20 and selling off
of its highs at the close.
Dow Down 34 with 15
minutes to go. All over the place again today.
Cotton -
Sharply higher today on acres. PB is now at 86% so be careful.
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