Friday NASS Report June 30th-

Corn - Report is bullish...but weather will reenter as main feature quickly. Called 2-4 higher.

The report came in 300,000 acres under the average trade guess but does represent.  Weather will start to be the main factor after we settle in on the open.  Funds could start adding new positions if weather holds as forecast.

Stocks were right on the numbers at 4.36 billion entering the last 3 months of the marketing year. 

Soybeans - Number is bullish here as well as we are in the lower part of the range.  Stocks were within range.  Market called 3-5 higher.

Rice - I call this number bullish as they dropped long-grain acres another 60,000 or 2%.  Market should open higher.

Thursday June 29th-

Corn - Market higher on weather as everyone waits for tomorrow planting reports.  Weather will be traded after the impact of the numbers is know and if they are a big surprise.

Soybeans - Nothing new here.  Friday's numbers are the next major event.

Wheat - Nice move back higher which we think is the dominate direction but near term we could see some back and forth.  Hold the cash for now. 

Rice - Lets see the numbers tomorrow.  We remain 50% long and liking the fact that sell signals are failing.

Natural Gas - No surprise here.  Saucer bottom still is possible with no weather concerns for now.

Cattle - Massive Key reversal down today after again testing 88 cents for the August.  Looks like a correction; however, if we reverse back up after making new lows in the next two days, we could still see an expansion market.  It is too early to tell.  The risk is to the downside right now but that could change quickly.

DOW - OK...anyone here think the Fed is about to stop?  Not I!!!  But they are close.  I still see 5 3/4 from the current 5 1/4 but they are talking like they are ready to stop.  Today's rally says they can't.  It's too clear...if they stop...the dollar gets in trouble...bonds will take a hit...actual interest rates for true companies cash flows will go up even more...the Dow will sell off.  Look for one more rate increase and look for words saying that will be the case from the Fed in the next three weeks.  Again, we are not raging bears but we do not see the Dow making new highs right now.  We could be wrong and in fact, I hope I am. 

Wednesday June 28th-

Corn - Today started higher on dryer forecasts but then the American model flipped again, as it is prone to do, and setup a wetter pattern than it had this morning and corn lost its gains closing right back at unchanged to up 3/4 for the front months.   The market will be bound here until Friday's acres numbers which are now expected to show 1.7 million more acres than the initial March report.  Tomorrow should be slow with maybe some more funds balancing the books but open interest has gone up the last few days not down.  Today's gap higher leaves a possible Island reversal but I expect it to close tomorrow with just a slow day of trading. 

Soybeans - Nothing new here.  Friday's numbers are the next major event.

Wheat - Today's sell off in wheat pushed the market right back to the equilibrium point and for now we have no positions and want none.  Longer term we like it but near term, there is still a harvest to get parked.

Rice - No follow through in the rice after sell signals yesterday.  We remain long at 50% but theses are major buy back positions for those NOT planting rice and they have a lot of profit in them.  New positions should not be placed just yet. 

Natural Gas - Good selling today as we probe the lows for the last several months.  There are some interesting call option possibilities for a hurricane scare but we are still several weeks away from that being a prime possibility.  There are a lot of people looking at the gate and wondering when everyone will make a run for it.  Frankly, I expect a push BEFORE a weather problem is actually out there. 

Cattle - Market sold off but just as I said last night, there were ready buyers on the break.  PB remains above 80% and if we can make new highs, we will go into expansion phase of a bull market that could add another $3.00.

DOW - Nothing new and nothing will happen until after tomorrow's Fed report on interest rates. 

Tuesday June 27th-

Corn - For the first time in 20 days, an intra day sell signal failed and then reversed giving a buy signal.  Does that mean buy it...heck no...it means the selling is slowing down as forecasts are turning warmer.  PB tonight is 27% for corn indicating no weather premium at all and the market is stretching for the lows.  No sign of one yet but today could be...again I say "COULD" be the lows for now.  Yesterday, open interest went up indicating both new sellers and new buyers...who is who. Looks to me that the specs may have been the sellers and the commercials the buyers.  Couple that with a change in weather forecasts, a refocus on the fundamentals in the demand side and we may have an intermediate low for now.  A move over $2.53 tomorrow will setup a test of $2.55 and a close over $2.55 will bring the technical buyers back to the market as that is last Friday's close.  On the downside, we see $2.45 as the near term target but it is a weak one at that.  We remain 35% long in options which using delta is about 25%-30%.   

This break should be bought but we need a good reason.  The main buy signal in December is $2.67 tomorrow.  Anyone want to take a bet on that happening...not me.  Anyway the point is that so much damage has been done to the charts it will take a huge move to the upside to generate a buy signal.

Soybeans - Dryer weather has sparked some bull activity here.  Remember, August is the big month for beans and that is a long way away.  PB tonight is 42% in November so it is in a bearish setup without the funds as a problem in ownership like corn. 

Wheat - Nice move up in wheat.  We are long everything here in the cash and looking for another place to sell using the cash market or hedges.  No futures are recommended but if we were in the market it would be long and buying on breaks.  By the way...PB tonight is 52% which is the first buy setup we have seen since June 6th.  We need follow through buying to setup a major run at the down trend.

Rice - MAJOR SELL SIGNALS TODAY...all three systems gave sell signals today in rice at the close; however, two of them need confirmation which is what we will be looking for tomorrow.  Commercials were major buyers today and that is a good sign as today's selling was fund led.  This break could be another 30 cents but it should be bought longer term.  Patience is the best recommendation.

Natural Gas - Read last night...nothing new.  The market failed to follow through after making new lows and there are some over head gaps that need to be filled.  We could bounce some more but the tide has not turned bullish yet.

Cattle - Resistance was found today at 88.00 in the August cattle.  A correction is possible near term but there may be enough buying on the sideline just waiting to enter the market on any pull back.  No reason to sell it as we could drop to balance the market and then move higher in an expansion phase. 

DOW - Read last night's comments.  Nothing new.  We remain out of market looking for major correction to continue.  Fed's meeting on Thursday is next big event.  Expect 25 basis points and no talk of moderating inflationary stance.  Not yet anyway.

Monday June 26th-

Corn - No sign of a low and yes...it has gone lower than we thought it would but not lower than we knew it could!!!  Tomorrow, there will be an LDP on corn which we did not expect this year.  Looking out at deferred months, the market is showing an LDP only for the near-by corn sales.  The question for this Friday's report is ...how many acres will the USDA put in the corn and beans.  If it is up by 2 million acres as some suggest, then at 160 bushels per acre we find ourselves with 320 million more from bushels from acres and 780 million more in total production.  That would give us over 2 billion bushels of carry over after the USDA projected just over 1 billion.  HUGE DIFFERENCE.  The market has been telling us the fundamentals are changing and while this supply driven market is totally controlled by the bears, it will end and it will turn in the demand phase, if not sooner, to the bulls.  Remember, corn is 34 inches high on average in Iowa (as of today) with the highest plats 48 inches high.  There is a long way to go for pollination. 

This break should be bought and I frankly think the lower it goes now the better.  Longer term...nothing has changed as we want to own the market longer term but we need to get a better handle on the crop size.  I doubt the USDA will increase acres by more than 1 1/2 million but they could.  With NASS nothing is for sure.

Soybeans - We are 10 cents from new lows here but with corn acres going up, bean acres should be down...right???  The market will probably hold through the next three days to see the numbers. 

Wheat - We are trading December wheat or I should say, wanting to trade December wheat.  No signal here to replace any sales.  We lifted hedges right in this area (3 cents lower) and will see how the market trades into the report this Friday.

Rice - If today is any indication, there will not be a squeeze.  Open interest should be down to 2800 tomorrow in July.  It it's not under 3000, odds are a bit better.  The pegging of the option at $9.00 was thought to be bullish but the market failed to move higher.  This is a risky trade for the near term with the supply of rice we have so do not trade it unless you have a real stomach for risk!!!  If you exercised the option and are long November, we would back out of the Nov for now and see what happens in July; however, you had better have talked to your trading house about taking delivery because you certainly could be in a position to take delivery.

Natural Gas - This market made new lows for the entire move today.  Now what???  PB is 42% and indicates lower.  The chart is bearish indicating lower and but so far there is no real strength in this move.  That doesn't mean there won't be it just means there is nothing yet.  Support is at $5.65 in August.  We have been waiting for another break to own more gas for the August September time period but have no reason to own it right now.  

Cattle - Last night we said..."Chart looks good and the target is $86.50.  That is where we should find the start of good resistance."   We made it today with a flurry.  No sign of resistance yet; however, PB is at 81% tonight.  That is over bought and indicates a correction soon.  We could expand this market which would mean another 4 to 6 bucks higher.  If your long, no reason to pull out yet but be careful.

DOW - Still in a bearish setup as long as it is below 11,200.  A lot of people are wondering about the Fed's actions this week.  We're one of them.  I still see a recession in the next several months (6 to 12) but that is subject to change.  With Gold retreating, we could get a break on the timing if Gold stays here.  My thinking remains, when the Fed stops...sell the US dollar and get ready for some exits from the market for liquidity reasons.. 

Sunday June 25th-

Corn - Perfect weather and a perfect forecast indicates no problems with the corn crop through the middle of July.  The market is down 3 cents as I type this and its now a matter of running the traps on the bear market based on supply.  We are long 35% using options and that will drop as the market goes lower...NO FUTURES positions should be on now, only options. 

This break should be bought and I frankly think the lower it goes now the better.  Longer term...nothing has changed as we want to own the market longer term.

Soybeans - Beans are still caught in a sideways market but if things don't change and soon, we will make new lows in beans.  $4.99 for November soybeans????  That is a stretch but not impossible.

Wheat - We will buy thins break but will wait for a good reason and time to do so.

Rice - Same thing as Friday, read Thursday nights comments...this will be interesting. 

Natural Gas - Tonight the market is down 14 cents in August and looks to be headed for the recent lows to test support.  No sign of any heat or weather problems in the Atlantic so there is nothing for the bulls to hang on to.  We will buy options on this break but need a good reason.  I will probably follow the 60 minute chart for clues to a turn in the market.

Cattle - Chart looks good and the target is $86.50.  That is where we should find the start of good resistance

DOW - Nothing new here from the weekend...the market is up about 12 points in the over night but that doesn't mean anything.  10,800 should be tested again as the market is still in a bearish setup.

Friday June 23rd- Quick Comment only until Sunday night

Corn - Market sold off on good weather but after the close the COT report showed the funds have dumped 25% of their position.  That is not surprising...what is surprising is that the commercials bought every one of those contracts (in the aggregate) as their open interest has dropped by even more than the funds and the small spec took on more shorts.  This was the situation as of last Tuesday night so we are really setup for an explosion to the upside IF there is any weather change.  No sign of any problems and July 4th is dead ahead.

Soybeans - Nothing new

Wheat - Nothing new

Rice - Closed right on the $9.00 strike price...this will be interesting next week.  (Read last nights comments below for details)

Natural Gas - We called it almost to the penny last night.  If the forecast were to turn really hot for July, this market will push higher as well.

Cattle - Nothing new

DOW - Nothing new

More comments on everything Sunday night.

Thursday June 22nd-

Corn - No change in weather out look and no change in our position.  A trend day down today which has set a range for now to hold the corn.  A test of the lows remain very possible and then the question of the July weather will be before us.  I still give the market a 50-50 chance at one more weather scare. 

The USDA report is several weeks away but this time we expect the USDA to increase acres.  How much?  That will be the big question.  Long-term we like the market to work higher and want to store as much as possible.

Soybeans - No change in position.  We will sell a rally here..

Wheat - We pulled back today as the first rally failed just as we expected.  Lets see where the buying comes in to support the market.  We like it long term and the harvest is certainly winding down so harvest pressure is about over.

Rice - Read last night's comments.  Let's talk about what is going on.  The open interest for the $9.00 call is 586.  Think about it.  The market is at $8.96 at the close tonight or 4 cents out of the market.  Tomorrow the option expires.  Now suppose you are short 200 of those calls.  Ask yourself the question, "do I want the market to close over $9.00 where all of a sudden I will be short 200 contracts?"  HECK NO!!!  Can I sell the market down and maybe not have to face exercising of the contracts where I jump my open interest up by 200 shorts?   

When a market trades right at the strike price where there is large open interest, it is called "pegging" the option to the strike price.  That is happening here.  Now here are the choices for the traders short of the calls.  Since they are going to be short a total of 586 contracts if the market closes over $9.00, they ask themselves just how many contracts would they have to sell to keep the market below $9.00 where the options would not be exercised.  Let's say they have to sell 400 to keep the market at or below $9.00...then they are better off by 186 contracts aren't they?  So, how many do they have to sell and what happens if it backfires?  It probably won't because there is another issue helping them.  With the market under $9.00, who wants to own $9.00 calls when they can buy it cheaper?  So, the long call trader is in no hurry to buy the market either if they plan on taking a futures position no matter what.  Make sense?

Bottom-line:  The next three trading days will be very interesting because if the short call traders are trying to protect themselves, they will need to be buying the July contract starting Monday.  It is going to be interesting and once this play is over, we will face the squeeze question next.

Natural Gas - I see a possible test of $6.35 unless there is a weather change.  No reason yet to own calls.

Gold - Looks like consolidation as we wrote about last night maybe occurring.  Longer term we like the market but won't buy it except on day trading programs for a while. 

Dow - Nothing new here.  The market may run for 10,800 again in the next few days but rallies are still possible. 

Wednesday June 21st-

Corn - Yesterday's Hammer Head formation was one of those 66% formations as the corn market rallied today by 3 cents.  We are trading more and more on the intra daily chart just because of the over night weather factor.  We sold our long position in futures out in pour aggressive account at the close today as the hammer head is not a long term chart; however, today was a trend day higher and that is significant.  Today's low now becomes major support in December corn.  We will watch for day trading signals again tomorrow.  PB is at 34% in corn which is bearish and the lows could still be tested; however, we see the risk to the down side from here very small compared to where it could go in a higher move IF it was driven by weather.  Day trading buy signals have a good chance of working.  We get back long 50% of our base ONLY if we can generate a strong daily chart buy signal.

So far, the rainfall amounts in the western corn belt are not that impressive and last night's report showed the corn is about 19 inches tall.  There is still a long way to go.  The market will rise and fall based on the 6-10 day forecast which tonight will probably show dry but normal temps into July 1st.

Soybeans - No change in position.  We want to sell rallies and think we are still in a place to get one to short big time.

Wheat - We bought back all hedges at $3.65 in July several days ago and some thought that was a mistake.  Right now it looks right.  I think we could stall on this first bounce and that is why I do not want to own anything here.  If you sold wheat when we said to, you are still up about 40 cents.  We will take our time in getting a storage play in place.  and for now we want nothing on in the futures. 

Rice - Unchanged today after starting and working higher.  Is there a squeeze in July or not?  I don't know yet and I'm not playing July anyway but if there is a squeeze, it should pull up the other months with it.  A look at the rice chart shows we made new highs in November but couldn't advance any higher.  This may be telling us that there is a play underway for July.  We'll see if we don't make new highs here again in the next few days.  Currently the market is over bought and the chart shows how straight up its been.  A correction would be nice but if there is a squeeze in July, it won't be much of one.  Buy breaks here.  We remain 50% and out about 20 cents from where we dropped back to 50% long so a break would be welcome.  This is why I didn't want to get below 50% long.     

Natural Gas - Same comment as last night...The market is set to test the low or close to it but keep an eye on the weather.  Any sign of a gulf storm will panic shorts here.  Longer-term, I want to sell a big rally here. 

Gold - Last night..."Buy signals today on the short term cycle.  The lows are probably in for now."  Nice buy signal don't you think!!!  We got a great day trade buy signal and took it today in the spec account.  We got out a little early but took home a little profit.  Gold may rally further but it may still need some consolidation at this price level.

Dow - Last night I said "it will take a move over 11,300 to get us back on the bull side of this one."  Today's action is certainly going to test the resistance levels we talked about and I can see it either way.   When the Fed pauses which I don't think is going to happen until September  now, we will sell the dollar.  As long as the dollar is holding and the fed tightening, I see bond, believe it or not, holding near this level...once the dollar starts to fall...LOOK OUT on the bonds and that will be counter the health and well being of the stock market.  Longer term...I WANT TO OWN THIS BREAK!!!  I am not a crazy 7,000 bear.  WON'T HAPPEN!!!  Just buy a solid break and that will probably be here in the next 5 to 7 months. 

Tuesday June 20th-

Corn - Unchanged today...Hammer Head formation pointing higher near-term...

The market did very little today but that is the good news.  The hammer head formation on the chart is positive but has only a 66% success ratio.  Forecasts are mixed as we head into the end of June but it looks like we could have a couple of weeks of major uncertainty on July weather prospects and the number of corn acres planted.  Interesting how the big shorts are saying acres are up 2 1/2 million over the USDA's current numbers.  Go figure!!! 

The market has factored in a big train event this weekend and if it doesn't happen, the market will have taken too much weather premium out of it.  What a dilemma...we are still long 35% in options and today we took long positions in the corn in our aggressive or spec account.  This is a small risk trade but the computer system said to buy it based on the activity in the December corn contract going into the close.  The later forecast shows another ridge forming with heat for the Mid-west at the start of July but that thing has gone back and forth so traders are discounting it here tonight.  The NWS afternoon forecast doesn't show this at all either so there is probably nothing to it.

It is the long term we are thinking about and we want to hold corn into the fall and winter.  The demand is going to be something to behold and corn basis is going to be all over the place as corn needs to be moved into the right position.  Also, the corn market will need to buy as much acres as it can for the increase in demand for the 2007 crop.  The risk from here over the long term is small.  For the short term, it is 10 to 20 cents in the December.  That is why we sold corn for only those not willing to buy back options and not storing and who will be harvesting before July 31st.  Otherwise we want to own corn through this break which I think is about over.   

Soybeans - No change in position.  We want to sell rallies and think we are still in a place to get one to short big time.

Wheat - Nice run today but still no buy signal.  We bought back all hedges at $3.65 in July and for now we want nothing on in the futures. 

Rice - WMP -- Unchanged...    I still like rice and like it a lot longer term.  We have to work through the increase in supply for the harvest period so I expect a down draft at some point but we could move higher in the short term getting more of the supply into the market.  A little squeeze in July is very possible as commercials do not want to let go of supplies they intend to hold into the fall.  They are expecting farmers to not sell right off the bat here in 2006 and I expect them to be right.  If the commercials are short July, they will not want to deliver and could be buying the market big time to control supplies.  This could get crazy.

Natural Gas - The market is set to test the low or close to it but keep an eye on the weather.  Any sign of a gulf storm will panic shorts here.  Longer-term, I want to sell a big rally here. 

Gold - Buy signals today on the short term cycle.  The lows are probably in for now.

Dow - Boring...and I do mean Boring.  Rallies should be sold near term as there is no sign of a low.  It will take a move over 11,300 to get us back on the bull side of this one.  

Monday June 19th-

Corn - Down 6 cents...As we said this morning, we are taking a more defensive position.  We took action for cash only sellers early today and we went flat corn just above the opening price of the day.  We are holding some options as our position but do not want futures right now.  The market is looking at great weather over the next few days and really nothing out there that says a major problem is coming.  Funds are liquidating but not fast enough to stop the bleeding.  We see the market testing the $2.35 level in September but with out any other major factors in the market, why own the market.  As we have said from day one of this weather market, it is the long term that interests us not the short term.  Once the crop size is known, the demand side will kick and we see a strong market from right before the major part of harvest into the spring of next year.

Soybeans - We have been and remain bearish to the beans.  Today's sell of was weather related as well and I can see all the weather premium taken out of the market before its over.  While beans can trade close or even under $5.00, the crop size had better be known before that happens.  Funds will now start putting on short positions in the beans and that will only add to the fall.

Wheat - Nothing here to push the market lower, the other grains will spin off some selling but we like the market longer term.

Rice - Another sell off with the grains that didn't hold.  This is the same thing that happened when I was in Chicago and eventually the market broke down.  Not saying that is happened again as we are under value but the other grains are going to continue to have an effect.  Longer term, we like the long side and we remain 50% long and will wait for a buy signal to own more again.   

Natural Gas - The action continues back and forth as the market puts in a temporary low.  Weather will be a major factor here and I doubt new lows are going to occur anytime soon.  The first MAJOR threat of a storm in the gulf is going to ignite the market to test higher levels.

Gold - Still no sign of a major bottom. 

Dow - The rally may be over or not.  I like the market to test 10,600 before finishing a major correction and frankly I can see it test 10,200 longer term.  I do want to buy this break but I'm still thinking the fall.

Monday Morning June 19th-

Comment - All the weather models coming out of the weekend have a weather system stall right over the heart of the Mid-west this coming weekend and with that the market sold off last night and is down 4 in corn and 8 in beans.  These same systems indicated heavy rain over the Mid-west this last weekend which did not happen; however, all the models are in agreement this morning and and we can expect another down draft as funds could become again major sellers in the next two days.  Another factor is crop conditions reports which are expected to show improvement.  I doubt it because we are now in the normal time for conditions to slowly drop.  In general, I think this report will be a non-event today.

All of our systems are now short corn as the technicals and fundamentals collide.  We dropped back to 35% several days ago and are using options for our position.  With the forecast and the technicals so solidly bearish, we will probably take what little profit we have left and go flat today.  My concern after looking at everything over the weekend is that the fundamentals are changing underneath us.  If corn acres are higher and there are no weather problems, I see March 07' corn 10 to 20 lower from here in a perfect storm scenario.  For our subscribers who will sell corn and not store it in 2006, call the tape as soon as possible as we have recommendations on the tape!!!!  This is for corn being harvested in the next few weeks.  Long-term this market will start a bull move once we get out of the weather scare and we see just how much corn we'll have.  Also, I am not saying at all we won't get a another weather scare or problem post-July 4th.  I am saying the first major time period for a weather scare appears to be over and IF you are not storing crops this year and must sell over the next 3 months, your risk has gone up.  It could be late September before the market resumes the demand bull market. 

Rice will sell off with the grains but I doubt the fundamentals are changing much under us in this market.  We'll buy breaks but we will need a buy signal to own it so patience is a must.

Friday June 16th-

Comment - Corn was higher as expected but it was an inside day and there was no reason to own it today.  This weekend is key for all the grains as we will sit through some rain and see how much the western corn belt actually gets.  After that, the forecast is pretty hot and dry but not major heat dome.  We will try to update the site Sunday night after we see the weekend weather results.  Monday will be pretty wild, one way or the other.....

Rice was higher as it ran stops going into the close.  We like rice long term and remain 50% long.  No buy signal today but we could have one in a few days if it really caught fire.  While I always say rice doesn't make a "V" bottom, in this case I can see it happening because it is a "perfect storm" scenario.  We'll see if there is follow through Monday. 

Thursday June 15th-

Corn - A good friend of mine called this morning (when corn was up 2 cents) and asked me if I thought "selling corn at the bottom was such a good idea?"  He was laughing and while the market was still 2 cents lower than where I sold it yesterday, his point was clear.  He hadn't sold it was sure the lows were in.  I responded that indeed I didn't think a person should sell at the bottom, but was this the bottom?  There was no indicator that a low was in place and again, the market is wrong a lot of the time.  In the time frame of next March, it's wrong right now but it is not trading fundamentals.  A very scary fact today was that on the break yesterday, open interest went UP not down and the options weren't traded enough to show a drop in fund exposure. 

Now the market is 6 cents lower than when we talked this morning and he remains long wondering how we could be this low.  How can the market be this wrong?  (He gave me permission to tell this story as long as I don’t use his name…I promised John I wouldn’t…I mean David…eh…Sue)

Is this the LOW???  Well, it could be!!!  With the action today which was a second trend day down in a row and the fourth time in six days we have had a negative trend day, the market is well oversold.  As a result, tonight we have two systems screaming that an intermediate low is imminent.  That means it should happen in the next three days and my guess is we will get a bounce once this weekends weather is factored in…in fact, I made the prediction to my subscribers this afternoon at 2:45, "the corn market WILL be higher tomorrow."  So...

Did I buy it today???  OK…I’ll tell you it to you straight!!  Yes and no.  When a market does this 90% of the traders will get “lock jaw.”  They will get into a position of fear to get out because “it could go right back up and I would be out.”  It is a fear that we all have had and will have again but here is the thing, we are still long 35% in the corn and in our portfolio some of that position is options.  So, what I can do to better my position without violating the “never try and pick a bottom” rule.  Here is what we did today.  We rolled our position down to a lower strike price and we sold some puts to increase our “delta” back to 35% long.  Did it cost me…of course it did but again, the idea is simple, long term we see the market higher and I want to benefit from this break not just “sit through it.”  Is the market oversold???  Absolutely but I’ll tell you, this computer doesn’t give a dang about my emotions.  It says re-distribute the position and I re-distribute the position.  It said get out, and I got out.  When it says buy it back, I'll buy it back. 

If tomorrow, we see a trend day higher start to form, I will go back to 50% long in a heart beat as the computer indicates that in the past when we have had this type of a washout...Buy back on a trend day higher.  I can do that now only because I sold out of much of my position this past week at higher levels.  This break is a gift but only for those who trade to take advantage of it and not just to sit on their hands.  Trading is an active sport, not a spectator sport so we need to manage and trade our position proactively.

One final point, there are new forecasts circulating that the actual corn planted acres will be over 80 million acres in the June 30th report.  If that is the case, we will have to completely rethink our long term outlook.  More on this in the days ahead.

Soybeans – Another day where corn craters and beans rally.  This is getting ridiculous.  Let’s see…the weather I bullish beans and bearish corn…not a chance.  The western Corn Belt has the dry conditions and that is where the corn is grown…the eastern belt looks great and that is where the beans are grown.  That makes no sense.  Again, it looks like the market is trading anything but fundamentals right now.   In any event, it is sideways at best and we are not trading it hoping for a good rally to be on the sell side. 

Wheat - We lifted all wheat positions yesterday and will not trade for awhile as harvest continues.  Longer term, we will want to own wheat but on the cash side, you need to sell only if you get a good basis.  We would store cash if at all possible as basis levels are going to increase dramatically once harvest is over. 

Rice – We made no change in our position here.  Options are too high priced to adjust our position as we like futures anyway.  We remain long 50% and will hold that until we see if rice and corn disconnect.  If that happens, which I doubt but am not willing to go out too far on a limb, we will address lowering exposure here but for now, we like our position and the long term fundamentals.  For you wanting to buy November or January futures, we’ll let the market tell us to pull the trigger but we will not want this break to get away from us.

Cattle - LIMIT UP LOCKED!!!!  Japan is back in the market on cattle along with Korea right behind it. We have cleaned up our mess with mad-cow and with the costs of feed and energy sky-rocketing, Japan can see the writing on the wall regarding meat supplies.  This is a great move today at limit up.  We are out after buying the double bottom in cattle and selling out on the first leg.  For now we remain ling in the field and looking for a good trade here.  We'll see where the resistance comes in near term. 

Natural Gas – Another big day up and we sit right against the top of the saucer bottom formation.  If we move over $7.60 in the August, we bust the bottom formation and set up a move to $9.00 and yes that is correct.  The fundamentals don’t agree but as I always say, the fundamentals are known in the technicals and it is obvious that the market need to price in more weather premium than the market has.    

Gold – Good follow through up today as gold rallied back.  There is no resistance all the way back up to $602 for the August mini contract so lets see if we move even higher tomorrow.   

Dow – Last night… “I still don't like it but a rally from here is very possible.”    That rally continues today but again, the long term out look is for the economy to cool too much so this rally should be sold.  The market has rallied about 30% of the break from the May highs so another 200 points up is where we will start looking to short the Dow; however, it will take a GOOD sell signal to short it.

Wednesday June 14th-

Corn - Another day trading sell signal which came after an early buy signal and we are now only 35% long as a result.  We will not go lower than that in the corn.  Here is the question, when the selling is over from the funds, who is going to buy it?  I said last night we could break another 15 cents and today we did 6 of it.  Tonight we sit almost on the price where the market closed before it got the very bullish plantings report, March 31st and we are 7 cents under where we closed the day before the May USDA report that sent the market so high.  Bottom line, we are under value but again, value is not the issue...as I said last night...it is liquidity and the funds are desperate to get liquid and out of the commodity markets...for now.  They are getting more bullets to buy the market when it turns just as we have done the last two days.  I've seen it many times, a market breaks like this, takes out the weak traders who don't want to take a loss and then turns and runs.  Longer term, it will be higher, near term, I'm not sure this blood bath is over.  If I get a daily buy signal I will take it but until then, we'll now sit long 35% and hope we get a buy signal lower than the price we sold off our latest positions.  (Read beans below)

Soybeans - Here is a market in strong contrast.  Beans were down 6 cents today with the forecasts for wet weather and everything looking so rosy for big yields.  Why weren't they down 20 cents or so?  The answer is obvious and very important...the funds are not in the beans!!!   Near term, there is little risk for beans in either direction as we currently sit with the weather forecasts.  At the same time, the funds are not going to push the market lower with weather still a big "IF".  This is why we see the corn below value as the fundamentals are not being traded, its the liquidity of the funds.  It is also why we say, when this ends, its going to be over quickly and the market could reverse dramatically in the corn.

Wheat - We lifted all wheat positions today at $3.65 taking out 43 cents on the short trade.  We are happy with that and longer term will want to buy back any cash sales made.  For now, we are out and will watch the market for a reason to trade it..

Rice - We decided to move back to our base position mentioned last night of 50% long.  I didn't like the open interest numbers last night as there was very little change.  Tonight we are sitting on only a 15 cent profit on the position in November and I wouldn't be surprised to see a losing position here before its done but again, I didn't plant rice so I'm not going to cry to much as this is my crop for the year as I have been saying, the real push in the market is going to post harvest.  We'll look at open interest again tonight and see if we moved the position very much but this sell off has given us no sign of a low...YET!!!  It could happen anytime but we will wait it out.

Natural Gas - WOW!!!  IF we move much higher, we'll see a break out in gas which shouldn't happen just yet.  Frankly, I think the lows are in but the question remain, when will we start to see some storm premium get added?  For now, we'll watch and see if we can keep the saucer bottom in the picture.

Gold - No sign of a bottom and it had its chances today.  When we get a bottom, we could see a real good pop but the funds are still a negative factor and could be big sellers on a rally.  In my opinion we have come down to low but again, that is normal on markets like this and the funds need cash...and that's is what they would rather have. 

Dow - I still don't like it but a rally from here is very possible.  The damage to the chart is severe and it puts traders in the mode of "sell it on a rally."  I know I would.  For now, I think the inflationary beast is about fixed.  I think the fed may indeed pause after the June increase.  That is 25 basis points below my first target of 5.5.  My guess is they pause to see the affects and then raise it on to 6% by years end.  The question for them is which to they want, inflation or economic growth.  They can stop inflation but with it will come a recession.  That I am still very sure of...its just down the road maybe 6 to 9 months.  THEN, we want to start owning the securities market.

Tuesday June 13th- Gold added - and it is a long comment tonight

Comment- Let me repeat the comment from earlier tonight first and then talk about each market...

Do you remember the movie, "Hunt for Red October".  It is one of my all time favorites.  In that movie there is a line where the radio man named "Jonesy" says, "these submarines don't exactly stop on a dime."  That is how I feel tonight talking about all the markets.  They don't stop on a dime when the funds start selling and then just keep on selling.  It is not a matter of fundamentals it is a matter of liquidity.  The funds got absolutely killed today in commodities across the board with Gold down over $40.00 and the Dow breaking over 80 points...in the last 20 minutes.  The only word for this is UGLY!!!

We dropped back to 50% in the corn today when a sell signal was touched off after a new high on the day was made but then we dropped back through the opening range.  This was a day trading signal but we took it because of what was happening everywhere else.  We did not sell any rice as that break occurred in the last 5 minutes of trade.  This volatility is exactly what we expected and warned about and just as the funds take it too high, they take it too low.  They don't sell because of fundamentals, they sell to get money in liquid form.  It's what I call, "buying bullets."  After selling corn I have some room to buy and maybe better the position (of course I could be wrong and we open 5 higher tomorrow morning!!!).   I don't have that luxury in rice because I never had a chance to lighten up today.  Liquidity is the name of the game and it is a rule we must follow.  Do not lose your ability to be in the game.  While we still have profits in corn, and rice, we are looking at levels which are below the value of the grains long-term fundamentally unless those fundamentals are changing.  The real issue is short term and it remains a question of liquidity for the whole market. 

Corn - We took an intraday sell signal and sold back to 50% long in corn.  I maybe wrong to have done that but it was one of those signals that usually is right but it's a day system.  Nothing has changed for us...we are in here for the long haul and know that for the time being we have to go through the weather market volatility where we look like a hero one minute and a sap the next.  There is little doubt in my mind that the risk is not down...it's up.  Yes, the funds can take it down another 15 cents so don't get stupid trying to double up.  No, I doubt they do.  We are headed into the low and it will be a good intermediate low at that.  Here's some history...

The year was 1995 and the Stocks to use ratio was 8.1%.  December Corn went off the board at $3.40 that year.  On June 13, 1995, December corn closed at $2.83.  There was a weather problem that year that occurred in Late July early August.  The March corn for 1996 went off the board at $3.96.  Today, we sit at $2.63 in December with no weather problem but a stocks to usage ratio of 9.6 and that is with a normal yield.  As we have said for weeks, IF there is a problem, there is no room for error and a drop below 8% on the stocks to use ratio would be explosive.  So far, no sign of such a drop.  What is interesting is that a look at the March 96 year will show that the move to $3.96 began late in August after the market had broke from the drought scare and then began a demand bull market from $2.88 to $3.96 in just 6 months.  That has been my opinion of this market since we first saw the signs on the wall that acres were going to be lower and demand through the roof.  It is still my opinion of the market. 

In the overnight trade we are now down 1/2 cent in corn with gold down another $10.00.  Look for corn to probe the low from last week and I think we have a 50-50 shot at taking it out; however, we will buy the break below $2.40 if we can get a buy signal to rely on especially if it coincides with a turn in gold or equities.  We' will go right back to 80% and in the process have a better average price than before.  I'm more nervous out of the market than in it but liquidity is something to trade for.  

Let's Talk:  I can remember hearing it said "the market is never wrong!!"  That is pure hogwash.  The market is wrong all the time.  It is not efficient and never will be.  With that said, it always has the money!!  So here's the thing...you can be perfectly right in your outlook at market analysis and lose money.  The key remains, to stay liquid and make money.  I'd rather make money than be right so for me, I'm going to stay on guard until this washout is over.  Longer term we will see that the analysis is right...assuming the main fundamentals do not change. 

Soybeans - Nothing new here...the market is not seeing the volatility because there is little speculative activity in the beans yet.  Funds were already short 13,000 contracts as of last week so there is little trading being done by them in this market.  We remain bearish longer term but weather can change anything. 

Wheat - Same as last night..."We remain short 67%.  We have orders to lift all hedges at $3.65 to $3.67.  A move back over $3.95 will be a signal to re-think the short side.  Depends on how and when it gets there as to how we'll trade against the market moving back up to that level." 

Rice - Ouch!!!  Well we got caught here.  We are long as the market sells off with the ret of the fund dominated commodities.  Fundamentals don't mean much when the funds decide they want cash not futures.  That is what is happening.  It not the fundamentals is the need for cash that is driving this market lower right now.  We could go lower still but we think this will be very short lived.  We still have good profits in our positions but we don't want to give it up if a ridiculous break is about to happen. 

We are long as a hedge against rice not planted in 2006.  Why grow it when you can buy it cheaper and with a lot less risk?  That is what we have done so it will be hard for us to lower our long position by much; however, we have some systems going short today and if the other grains don't stop their down draft, we could go back to 50% long.  We will not reduce our position below that level.  For you who are not up to 50% long, here's your chance; however, we are not going to try and pick a bottom.  We will let the market turn and give us a reason to own it and then we'll buy it.  Patience is a good virtue right now. 

Natural Gas - WOW!!!  Down 8 cents with crude down $1.70???  We still see a low being put in but the fundamentals sure don't agree.  I wonder who will win???  No...I don't have a clue. 

Gold - OK...Is it over?  Well, PB is at 23% which says it may not be over yet.  We could drop another 40 to 50 bucks before it is really over; however, a bounce could occur at anytime.  Things is, a bounce should not be bought but probably sold.  Think liquidity and the market is telling us, traders would rather have cash than gold and and no, they are not the same thing.  Cash is king and funds want as much of it as they can get for now.  Frankly, the activity in all the market proves to me that the Fed is finally winning their war on inflation.  Long term, I like gold...however, there is going to be a lot of time to own it and own it right.  Now is not the time...at least I don't think so. 

Dow - Boy oh Boy...we'll what can I say but this has gone just about as I expected.  I'm looking for a bounce and soon but it could come from nearer 10,600 than 10,700. 

Tuesday June 13th-

Comment- Do you remember the movie, "Hunt for Red October".  It is one of my all time favorites.  In that movie there is a line where the radio man named "Jonesy" says, "these submarines don't exactly stop on a dime."  That is how I feel tonight talking about all the markets.  They don't stop on a dime when the funds start selling and then just keep on selling.  It is not a matter of fundamentals it is a matter of liquidity.  The funds got absolutely killed today in commodities across the board with Gold down over $40.00 and the Dow breaking over 80 points...in the last 20 minutes.  The only word for this is UGLY!!!

We dropped back to 50% in the corn today when a sell signal was touched off after a new high on the day was made but then we dropped back through the opening range.  This was a day trading signal but we took it because of what was happening everywhere else.  We did not sell any rice as that break occurred in the last 5 minutes of trade.  This volatility is exactly what we expected and warned about and just as the funds take it too high, they take it too low.  They don't sell because of fundamentals, they sell to get money in liquid form.  Its what I call, "buying bullets."  After selling corn I have some room to buy and maybe better the position (of course I could be wrong and we open 5 higher tomorrow morning!!!).   I don't have that luxury in rice because I never had a chance to lighten up today.  Liquidity is the name of the game and it is a rule we must follow.  Do not lose your ability to be in the game.  While we still have profits in corn, and rice, we are looking at levels which are below the value of the grains long-term fundamentally unless those fundamentals are changing.  The real issue is short term and it remains a question of liquidity for the whole market. 

With this said, come back in the morning as I have some studying to do on a bunch of charts.  The question for me to night is "where do the funds stop selling and why?"   It will be both a technical and fundamental situation to get this thing to stop drifting as we all know, "it will not stop on a dime."  It will stop with with a WHOOSH...the other direction.

I will re-update the site by 8 AM in the morning on everything.

Monday June 12th-

Corn - Typical weather market.  Remember, the mark of a good trader is keeping your head while everyone else is losing theirs.  As we said last night, we sold off the additional corn we bought on Friday and took a quick 8 cents out of the market today and now we are back to 80% long which is still too long.  I'm a little nervous here but the forecasts are still showing dryer conditions headed into the July heat.  The corn is not hurt not even close but there are two other factors besides the weather.  First, hurricane season and second, the world fundamentals.  The hurricane season could have some affect on energy prices and thus corn.  The fundamentals are all showing that a tightening is coming.  This is like a weather forecast.  We say a storm is coming and some think it won't be that bad but the forecast longer term is really clear...supplies WILL tighten.  We will buy another big break if we get it and on a big pop upward I will drop back to 60 to 70% long depending on the pop.  That is my idea tonight...it is subject to change.  

Soybeans - Viva Las Vegas...  We haven't done anything because longer term I want to be short here.  Long corn short beans maybe the ticket but not on this side of August...we'll let others make and lose it here before we enter later this summer...on the short side.  Of course, if there is weather damage to the beans, all bets are off but that is down the road a way for sure.

Wheat - We remain short 67%.  We have orders to lift all hedges at $3.65 to $3.67.  A move back over $3.95 will be a signal to re-think the short side.  Depends on how and when it gets there as to how we'll trade against the market moving back up to that level.  Today's action was bearish short term.

Rice - We remain long here with PB still positive and the fundamentals supporting higher prices in the long term.  $9.55 remains resistance for now but the contract high of $9.63 is real resistance.  Remember, we talked about the $9.65 target weeks ago and for the most part that has been hit as $9.63 is close enough.  Even so, we think the market will move higher and trade over $10.00 before it expires but that is a long time from now.  We will buy more on breaks FOLLOWED by good solid buy signals.  Everyone should be in some kind of a position now and looking for another entry point on more long positions.  

Natural Gas - How strange is this...a higher close in natural gas with crude down over $1.00.  Frankly, we would own crude lower and natural gas we would sell a little higher but only in the short term.  We still see the Saucer Bottom as a possibility. 

Dow - With just less than an hour to go we are down 45 points.  Investors are getting their heads handed to them and the pain is starting to surface.  Institutions will have a hard time turning the tide as investors are calling for money and bonds at 4% are starting to look very good.  If you are following what we are doing, you are out with money being made in bond funds and money market accounts and just watching the carnage mount up.  Ok...maybe that's a little too much...anyway, we will look to buy this market later....probably much later!!! 

Sunday Night June 11th-

Comment - The market tested major support on Friday and didn't bounce off of it very far.  Open interest has not fallen very much so if the funds are selling their selling to new buyers which could only be commercials.  Small specs looks to be selling more which is not bearish.  As I type this on Sunday night at 11:00 PM the corn market is up 7 1/2 cents on a new forecast of hot weather.  There seems to be divergence between weather forecasting services as a very popular private weather service has come out forecasting a very hot period of time in late June and early July.  There are other forecasters hoping that is wrong so they can claim to be a better forecasting service.  Yep, there is a battle always going on for who is right.  As for me, don't have a clue as to weather forecasting but I can tell you this, it's June 11th and there is a long way to go.  It is not over and for corn to trade back to $2.40 was an out right gift.  One in which we bought even more corn positions on the break.   

So...now we are long 90% in the corn.  Man that is heavy but I just couldn't ignore the gift.  I will take some of it off tomorrow if tonight's action holds into the day session.  Yes, I can trade at night but here's the thing, we could see a higher move than 7 cents IF the weather forecast holds through the night.  I don't see that much risk here, not in corn, wheat or rice.  The soybean market is different.  A weather scare is a golden selling opportunity in that market.

Cattle - Glad we're out.  Stay out for now but get ready to buy back needs for this winter.    

Natural Gas - Saucer bottom still in tact and looking more and more like one is trying to form.  The early tropical storm in the gulf is bad news.  The water is warm enough to support a hurricane in mid-June...not good!!!  We will own calls very soon.

Dow - Closed under 10,900.  I see a possible rally but still see the Dow near 10,600 in the next few weeks.  Notice I warned last Monday that the market looked vulnerable for a bad week a major close under 11,000.  Now, we'll wait things out before thinking about owning anything here.  It is possible that before the summer is out, we are trading under 10,200 and under 10,000 before he year is done. 

Friday June 9th-FROM CHICAGO

Comment - Report is bullish corn and wheat.  Neutral for rice and soybeans.  Corn should open higher as again the huge demand facto will play a role in the long term aspects of the market; however, weather will still play a major role near term.  It looks like the American model has again flipped back to normal weather away from the dome developing as yesterday's did. 

Look for the corn and wheat to start higher.

Thursday June 8th-FROM CHICAGO

Comment - No reason to make much of a comment tonight.  Tomorrow morning's numbers will be the next feature and then we will go right back to trading weather and longer term fundamentals.  We will have a comment here first thing in the morning, hopefully by 8AM.

My only other comment is on the Dow.  We need a correction here but rallies should he sold as the tide has turned.  I see the Down back down toward 10,200 in the next few months.

Wednesday June 7th-FROM CHICAGO

Corn - The market ran out of sellers today and put in a nice little reversal closing near the highs.  Most of the rally came on news that some longer term forecasts are showing hot weather...OK...it is the summer and we are 4 weeks from July 4th so hot weather is a pretty good bet.  We bought the break today when the 30 minute buy signal was generated at $2.46 in the July.  We'll hold all positions but I might lighten up if we are very strong tomorrow.  There is good rain the forecast over the next 10 days so as a trader, I'll take something off the table.  If you are a hedger, there are bigger fish to fry so just stay put.

Let's Talk:  I need to remind everyone again that there are two types of bull markets...supply driven and demand driven.  This is a supply driven market right now even though there is a big supply of corn, if the weather does turn off bad, then we will see a dramatic bull move because the supply is unknown.  I have already said in our long-term outlook that I expect no such problems this year.  There will be a drought scare but I don't think there will be a problem; therefore, we will sell a sharp rally in a scare.  Long-term, it is the demand driven bull move that I want to own.  So...near term, we will sell a rally and then buy a major break into the harvest time period for the demand phase which I think will follow. 

Soybeans - Viva Las Vegas...  Buy the 660 0r 680 call out right for a scare OR buy the 620-720 bull call spread.  That's the best I see tonight.  This is a drought scare trade ONLY...Hedgers, keep your money in your pocket.

Wheat - We remain short 67% and will hold on to that for now.  We may not stay in this very long as there is a slow down in harvesting which may take some of the price pressure off.  We like wheat longer term.

If you didn't sell futures when we suggested, I wouldn't sell here given the current situation.  I doubt a big break is coming as the crop is not going to be that big and the long term fundamentals are bullish.  I'm looking for 25 - 30 cents out of this hedge and then will pull it in and store the wheat.  The basis is telling us, long term prices will be higher for cash sales.

Rice - Well we got a break...literally and the market gave us another chance to add positions so we took it.  Today was a key reversal up and we closed on the highs of the day.  Like in the corn, the selling just dried up.  We bought positions for almost every one today when we were down and as we have been saying, we see little risk here.  We'll stay long for now and see if there is any follow through tomorrow.  We might buy more if ewe can get a good buy signal but I don't expect that before the report on Friday UNLESS something knows something we don't.  That is certainly possible and it its true...it will show up in the market tomorrow.

Also, tomorrow we get export sales data.  Things are very slow right now in rice so expect it to be dismal at best.  Even so, I would think this is already factored into the market.

Natural Gas - Nice break today on moderating weather.  Here is the rub...some of the forecasts are starting to show heat and that will send prices right back up; however, the market shrugged off those ideas today and will re-evaluate the market tomorrow.  Tonight's weather runs are going to be important for this contract tomorrow.  We are not changing our ideas here.  Longer term this is a buy but near term we need to do some work in this level. 

Cattle - We are out right now waiting for the market to tell us which direction.  I can see it either way.

Dow - A solid close under 11,000.  We see it lower and nothing has changed from our ideas written over the past four weeks.  They are below if you want to take the time and read them.

Tuesday June 6th-FROM CHICAGO

Corn - The break continues as perfect weather for the corn, a whole 2 inches tall, is all anyone wants to talk about today.  Energy markets were lower as well as gold so there was no reason for anyone to buy corn today.  Except for me...I bought it on the close expecting a test of resistance tomorrow but it's only a floor trade strategy.  I think corn could sell off another 3 to 7 cents but where is it going then???  USDA numbers are this Friday so we'll need to see them but I doubt they make much of a change to the supply.  We'll see what the trade expects starting tomorrow.

Soybeans - Viva Las Vegas...  It is a throw of the dice but the break is letting us weather scare traders get our positions cheaper.  We want to buy one ourselves but will let this break run its course.

Wheat - We remain short 67% and feeling much better tonight.  Hold on and we'll lift the short term hedges if we can rally over the $4.08 level.  I doubt that happens this week as more and more traders today said they thought the top was in for now...I agree.

If you didn't sell futures when we suggested, I wouldn't sell here given the current situation.  I doubt a big break is coming as the crop is not going to be that big and the long term fundamentals are bullish.  I'm looking for 25 - 30 cents out of this hedge and then will pull it in and store the wheat.  The basis is telling us, long term prices will be higher for cash sales.

Rice - DANG IT!!!  Tomorrow will be interesting.  We tried to buy more rice today but didn't get it done.  The market was range bound by a large (not huge but good sized) offer in the July at $9.05 and a large bid in the November at $9.38.   No one else was willing to trade the size so we froze the market in a tight range for the rest of the day.  If the wheat and corn try to rally after the open tomorrow, we may see rice move back up but I can still see another 10 to 20 cents down here with no damage to the trend.

Natural Gas - Lower today...saucer bottom still possible.  By the way, it will take several more weeks to nail it down if it is occurring.  We want to own more on breaks here.

Dow - As I write this, the market is down 92 which is off of its lows.  I can see a bounce from this level but I think the attitude is changing to a "sell rallies" concept for many of the large funds.  We'll take a look at the close but for now, I still like being short right here but ready to take profits and see if I can re-sell it higher.

Monday June 5th-FROM CHICAGO

Corn - Once again the the market proved that things are certainly right with the world as corn went down today on the idea of rains across the corn belt.  Most of the traders I talked to today said the corn was in great condition and rains will only help the crop.  That is why we sold off today but I have done this long enough to know that the forecasts will turn dry again and there is little to no premium in the market.  The other thing obvious to me is that traders here view the funds positions as bearish...they could be right but I think there is another side of the argument.  I think the funds know that there will be down days but the larger occurrences will be of up days and the long term trend is up...with or without rain.  We still will buy breaks in corn. 

Soybeans - I will just repeat exactly the comments from last Friday..."The market has no weather premium in it at all and options are a buy RIGHT NOW if you want to take a shot at what I call the pure Las Vegas drought trade.  If your going to do it...DO IT NOW!!!  OK Monday morning!!!  Decide how much you want to spend, and where its going to go in your mind and pick the option that gets you there with the most pop for the buck.  Viva Las Vegas..."

Wheat - We remain short 67% and EXTREMELY nervous.  Again today the market couldn't get over the $4.08 level which is resistance.   We will stay short here in the futures.  Lets talk cash...

The cash market is tough in here with the basis as bad as it is.  We suggested selling 33% in the cash but only if you could get a good basis for it.  The current basis is so bad I doubt anyone sold cash...I'm hoping that!!!  Anyway, the basis is telling us to store cash and that's what we have been suggesting and why we are short futures.  Downside in wheat is setup to be $3.65 but there has been no follow through to the selling of last week.  We will lift hedges if the market closes over $4.08 this week. 

Rice - We will buy breaks and today's break may signal a little more downward spiral the next few days.  We want to own it long term. 

Natural Gas - Still bottoming action but today's reversal down sets up a test of the lows near $6.00.  We will buy it there if it happens.

Dow - We have been saying it and saying it...the market looks like a top and today's move down of over 200 points is just another example of how smart people can become very stupid.  They have just gone form saying..."I know its going higher" to...I don't know anything which is exactly what happens at a top.  The majority of traders go from super smart to super confused.   I on the other hand, have gone from super confused to super smart!!  If we take out 11,000 tomorrow, this could be a very bad week for the longs in the market but your not long because we said to get out of longs weeks ago...right????

Friday June 2nd

Comment - Next week I will be in Chicago all week long trading on the floor.  I will try and update this page every night; however, if this page is not updated after Monday, please understand that means I cannot update it from where I am.  You guys in the service, I will update the market line every day, twice a day from the floor.  Tonight's comments will be short.

Corn - Today's up action is weather driven and lack of selling which I think will continue in the corn. 

Soybeans - The market has no weather premium in it at all and options are a buy RIGHT NOW if you want to take a shot at what I call the pure Las Vegas drought trade.  If your going to do it...DO IT NOW!!!  OK Monday morning!!!  Decide how much you want to spend, and where its going to go in your mind and pick the option that gets you there with the most pop for the buck.  Viva Las Vegas...

Wheat - The market stopped shy of our $4.08 average but not by much and the chart could go either way.  Frankly, I think the seasonal tendency is for wheat to turn lower but seasonal tends be danged, this is not your fathers futures market anymore.   For the long term we remain bullish but a down draft into harvest is possible but it won't last for long. 

Rice - How about no sellers today???  Chart is bullish and so are the fundamentals.  I can't paint it any clearer than I already have; however, I think a down draft in  rice is possible if the other grains roll over given the current supply of rice.  The things is, it's owned mostly by commercials so where is it going.  How many time have I asked that???  It's going to be wild and there will be days you can buy the market.  Don't chase it...you'll be like the proverbial dog who chased the car until he caught it...then wished he hadn't. 

Natural Gas - Well, the saucer bottom is still in tact but today's action was bullish and may setup a breakout which will bend the bottoming cycle.  Se what happens here if a storm pops up somewhere...we have bought a lot and will buy more on breaks...any breaks!!!

Dow - No change...read below the comments over the past week.  Still looks like a top.

Thursday June 1st

Corn - Massive key reversal up today as new buyers entered the market on a ling term weather forecaster calling for a heat dome over the Mid-west after the next two weeks.  This could bring about a substantial bounce and this is again why I do not want to get out of corn.  We may roll options, buy in parts of our spread call but we want to stay long her for the time being.  Even adding if we see a break out.  The worst thing that could happen would be to roll out of a position and not get back in.  Look at rice below...it almost happened to us there. 

Soybeans - OK...the time has come.  We are going to get on a relatively cheap call that could make some money but not a lot.  Options are so expensive.  Tonight, I will mention the trade on the phone line for my local clients and then I will put it out here the day after, so subscribers call for the bean option play tonight. 

Wheat - After the collapse yesterday, today's action is not good.  Some bulls will point out that there was no follow through while the bears will argue that there was no bounce and things are expected to be higher IF the weather changes for the corn and beans.  Maybe so, we have nice profits and while I will give them back, I will not let the hedge position become a loss.  If we can rally back over $4.08 which is our average in July, we'll lift the hedge and see what's happening.  Remember guys, this is a weather market even for wheat. 

Rice - How about that...thanks who ever sold it today as it worked magic for us in our position.  We had gotten to 70% long a few weeks back and then took off profits a little early around $9.48, only to see the market work on higher and making the lifting of the position look way too pre mature.  The good news is that today's break gave us the chance to own some of that back so we went back to 70% long right here at the lows of the day.  Can it go lower?  Of course and remember, I know when a market is doing what I think it should, I'm headed for a problem.  WE CAN NOT GET COMPLACENT AND SO POSITIVE IN OUR POSITION THAT WE MISS WHAT THE MARKET SAYS.  Yes I'm back to 70% long...is that the right thing to do...I think so but if the market drops below the major support point I will say, I think what I'm doing is wrong but I'm cutting way back anyway. 

By the way, support for November is $9.25-$9.26 on two different systems and then $9.07.  I am long from below $9.00 on the average so I am going to give it a lot of room.

Natural Gas -  Saucer bottom building!!!!    I will leave that sentence in here until it looks like it has been violated.  The market tried to rally today but found willing sellers.  Remember, will sellers are those who can sell while there is no storm threatening the Gulf of Mexico.  When we have one, that selling will not be there; however, a June storm is  not what we need to worry about...It's a late July, August and September storm that will have this thing nuts.  I', looking at some hedges or setting up some free Calls in the back months.  More on that this weekend.

Cattle -  We made the toll complete today making about 40 cents on the June- August roll but now we have to monitor August very carefully as it probes against resistance. 

DOW -  Another day up but come on...where is the power.  If I was brave I would sell the Dow mini on the close tonight because the buying looks terrible at this level.  We'll see if that would have been the right thing to do.  And nope...I'm not brave.  There are very few "brave" traders who have traded 30 years like I have...I'm not one!!!