Thursday June 30th - 1:30 PM  - Quick and Early

General Comment  -

I don't have the exact closes but it looks like beans are down 22 and corn down 4 to 5 or so.  The close was fast a furious.  Radar is starting to dot up but scattered rains are now expected.  The surprise would be a drier atmosphere at this point.   

Today's market had something for everyone.  The bears can say we made new lows and the market closed lower to sharply lower.  The bulls can say, ya'll but we made new lows, ran stops and then rallied at the end.  So both are happy right?  For us, we're going to just keep on saying it, sell rallies. From here a nice rally in beans is still possible and I'm talking 50 cents even.  In corn, we could rally here too but not near like beans.  Notice I use the words "could".  For a long in the market this is called "hoping."   For us as producers, it would be called "A gift".  We are short at much better levels than the close tonight and I'm not going to sell anything down here yet.  Lets hope for a gift and that we can sell at higher levels.  Tomorrow, we will have some more decisions to make. 

Bottom line:  We want to sell rallies and would sure like to see one and tomorrow if possible.  We remain short futures, and short calls out of the money.

Rice - PB dropped to 17% today at the low.  We scale down bought the September but only got 3 on so no big deal.  The bounce came at the end and I would expect maybe a move back to $6.80 to balance the oversold condition.  This should correspond to the deliveries being worked out in July.  We may be a seller if Sept can rally enough.

Natural Gas - I like the short side here as well.  Natural gas has almost fallen to our support level which could provide some support for natural gas.  It is interesting to note, that one year ago today August gas closed at $6.15 some 80 cents under today's close yet today we have a lot more gas in storage.  There is certainly some room to the downside here especially if crude is about to have a major break.

Thursday June 30th - 10:30 AM -Mid-morning update today

General Comment  -

Markets are lower as I write this with Beans off 15 cents and corn off 4 cents.  We have sold more corn today getting to just over 50% sold now and are looking to get to 75% before the close tomorrow.  We are doing some of these sales by selling calls which allow us to have some protection and can roll them into futures on bounces.  This process sounds expensive but in years past, I have found it to be very affective IF there is the time premium in the market to allow for it.  With 240 Sept calls trading at 7 1/2 cents, there is some protection there as we are 15 cents out of the money and corn would have to rally 22 cents before we would have contracted sales at $2.47 1/2.  I would take that all day and all night right now.  The odds of the market getting back to that level is slim to none.

In any event, soybeans is a tough one today.  The report is being talked about as being bullish. HOGWASH!!!  The market had a lower carryover in it than what this report will generate.  We want to sell a bounce here and we have sold some September calls out of the money and will take those strike prices as good sales points if we can rally.  That is still a possibility but could be fading. 

Look for the a weather flip flop again today or tomorrow with some weather model reportedly taking out the rain.  If there is going to be a surprise it will be a bullish one but I wouldn't be trading for that.  Sell a rally is still the best advice here.  I just hope we can get a buy signal which then sets up a sell signal.  The comfort zone now is in being short. 

Thursday June 30th - 8:00 AM -Mid-morning update today

General Comment  -

Weather is a fickle thing.  Apparently the weather runs overnight have a lot more rain in them and the market collapsed from our 8:30 update.  Beans down 12 and corn down 3-4.  The reports this morning are slightly bearish beans and bullish corn but over all I'd say neutral compared to weather.  Stocks in both were lower than expected but the acreage shift from beans to corn isn't as much as expected but not to any great amount.

We will test major support right off the bat this morning and this could get real ugly today.  We are short but not short near enough so this morning we will be looking for anything to lay off some more risk for corn producers.  Some in the trade may talk up the corn number and try to find support early in corn...We are selling corn unchanged to 1 cent lower based on that. 

For spec's...My dad always said, "your first loss is your cheapest loss".  When it comes to futures this is so true.  If you are long, are you married to the position?  Are you worried that if you get out, it will go up?  THEN FOR GOSH SAKES GET OUT AND GIVE THE REST OF US A CHANCE AT A HIGHER PRICE.   OK...so it's not that funny.  I know it hurts but here is the question, do you want to be wrong IN or OUT of the market.  If you want to play this game long term, be wrong OUT of the market.  You can always get back in and if you have never been short, it's a great place to be in a market unrolling from a weather scare.  So for today, try to keep your head and some capital while everyone else around you is losing theirs.

We remain in sell mode and want to sell rallies if we can get them.  Just remember, the funds are still liquidating.  THEY HAVE NOT BEGUN TO GO SHORT!!!! 

Wednesday June 29th - 8:30 PM - OK, so I'm 30 minutes late...

General Comment  -

Markets tonight are setup just as I expected.  Beans are higher by 7 and corn is down 1/2.  Tomorrow mornings report may be bullish enough to send the bean to our rally objective and then it will be very interesting.  Corn on the other hand will find it very hard to get any bullish news at these levels.  It will take longer term weather.  We are still in selling mode on rallies.

Wednesday June 29th - 2:00 PM -

General Comment  -

Before reading the rest of these comments, a disclaimer.  All of the comments below are assuming a neutral report tomorrow from the USDA.  I can't tell what the weather is going to do and for sure, I have no idea what the USDA is going to do.  I assume the market knows stocks and acreage and it is already in the market. 

Now to today....Actually a range bound market but in the overall scheme of things, NOT a god day.  Why?  Well two things are at work...1)  We are accepting the lower values with weather concerns in every rumor out there.  2)  The market rallied early and didn't hold it.  With that said, I expect the market higher tomorrow!!!

No, I didn't make a mistake.  This is a weather scare market and today's sell off didn't produce selling, it produced buying.  Think about this for a second.  What should we expect when a market breaks in a collapsing market?  Answer...more selling.  Today when we broke, we found buyers not sellers.  That means we are in a falling market and no longer a collapsing market.  What should we find in a falling market when it rallies?  Answer...selling.  No surprise here, we found sellers at higher prices today so now we should find more sellers but at Higher levels.  I think conditions are there for the corrective bounce to continue; however, when that happens, we need to be in the seller's camp.

Then why isn't it a good day?  If your bullish, today was not good.  There was no follow through buying and we could not generate a trend day higher which we needed.  We may do that tomorrow but the resistance point of $7.15 in November is going to be huge and it will take new damage to the crop to get past this.  In other words, we are in a correction of what is now a bear market.  In the short term, the market has a bearish setup and should find selling on advances.  Tomorrow, we will sell November calls if I can get a rally.  If we don't rally, we will sell calls if today's lows are taken out. 

Corn is proving the obvious.  There is too much corn and the damage in corn is too isolated to make a big difference.  We sold more September calls today on the opening getting to 50% on some way out of the money issues.  We want to sell another 20% in futures if the market can advance to the $2.43 in December.  Then another 10% at $2.46.  We will then wait to see how the market trades from this point and how it got there.  In other words, what is going on. Frankly, I think odds favor those orders not being hit and we then will need to sell on stops if things turn real bad for prices over the next two weeks.  Today's low is good support and $2.35 in December really needs to hold. 

Rice - Yuck!!!  PB is at 21% so we should be approaching a low.  There is no reason to buy it right now so don't do it!!!  The gap in the rice now sets up a move to the $5.95 level in September.

Natural Gas - Crude fell another $1.00 today as it is in free fall.  Support is another $2.00 away.  In Gas we rallies but then sold off going into the close.  Today's bounce was what we expected from yesterday's low but now I'm concerned.  If we sell off tomorrow and head for the lows and are able to take them out, we should get very heavy selling in the market.  I think the downward trend line is too steep but any rally should meet heavy resistance at the $7.30

Wednesday June 29th - 12:00 PM - High noon indeed

General Comment  -

Markets have turned lower and are now in scare mode in any direction.  Rally and people want to buy, break and they want to sell.  Hold your powder guys!!!  Don't get sucked in.  Read our weather market page again.  Never buy it up on the day or sell it down on the day unless its at the close OR there is a buy signal being generated where a known stop can be placed.  This is where the market can't make up its mind; however, if December breaks $2.35, it made up its mind!!!  We still will SELL RALLIES...NOT DIPS.

Wednesday June 29th - 7:00 AM

General Comment  -

Markets continued their "dead cat" bounce over night with beans up 8 and corn up 2 1/2.  I can see a bounce in the November back to $7.15 but it may be a real struggle.  Last nights weather forecast has put more rain in mid and eastern belt for after July 4th but there is also heat in the longer term forecasts as well.  In this situation, go with the rain NOT the heat.  Farmers, it's time to sell!!!! 

That's right, we are in sell mode now, plain and simple.  We will use this bounce to add to current sales and get to at least 50% sold and probably more like 75% sold by Friday.  Yes, that's two days away.  We have already sold calls and will sell more on the bounce, maybe even more today.  March corn futures at $2.50 is our first sell point and we will sell aggressively at that level.  We will then add more sales every 2 1/2 cents higher up to $2.60 which I think, at least on this side of July 4th, isn't going to get hit.  If the market goes higher after July 4th, fine, we will still have some corn to sell but we MUST face facts here.  Where is the risk?  For us as producers, it's clearly now to the long side of the market and this little bounce we get today and maybe tomorrow MUST be used to move that risk to somebody else.

In Soybeans, most would say we have a different situation.  They still have some damage potential that could trim the carryover by a large amount and if the weather were to turn extremely dry late in the growing year, we could still explode higher and if elephants had wings and could fly, we all would be wearing umbrella hats everyday.  OK, so it is more likely that there is a late season drought then we have to worry about elephant droppings, but I'm not so sure it's THAT more likely.  We will sell calls here as well starting at the strike price levels were beans ran out of gas on the way up.  The $7.60 call in November is our first strike price and then we'll look at the $8.00 later.  I will be following a 15 minute chart today to determine when to sell the calls.  That assumes I can get a buy signal to setup the sell signal.  Out right sales will start at $7.10 in the futures and we will get to 50% sold as fast as we can. 

"But Dennis, what if your wrong????"    I hope the heck I am wrong because I can sell it again or buy puts for producers for next years crop as a "spec-hedge" in the market.  Umm..."Spec-hedge", now there is a topic I haven't written about...I'll put that on the agenda.  Anyway, it is simply a question of RISK.  As a producer, I can afford to be wrong selling corn futures at $2.50 in March.  I CANNOT AFFORD TO BE WRONG AND END UP SELLING MARCH CORN AT $2.10 in the next few weeks.  I must ask my self, "where is the risk?"

If you are a Speculator, and you have been very bullish, you probably don't like reading this site so much right now.  Just remember, I'm not saying the bull market is over, its going down, you should be short, and the sky is falling.  I do think odds are high that all of those things are true, except for the sky falling.   I'm telling producers whose very lively hood depends on marketing..."THE RISK IS TOO GREAT HERE TO BE LONG IN THE FIELD.  WE MUST GET TO 50% SOLD...BEFORE FRIDAY!!!"  Don't let anything confuse you on this.  Don't allow hope to be your focus.  The market has spoken and we will get sold at least to that level in the next three days.

Let's see where the rally that started overnight stalls out.  It could be higher than I think but I don't like the weather forecasts this morning.  Going into this weekend, I want to be carefree and risk free.

Tuesday June 28th - 4 PM

General Comment  -

Another wild day as beans finish off 29 3/4 with corn down 3 but both are off of their lows for the day.  I think there are two main things to point out tonight for tonight's session.  First, the 6-10 day still is hot with normal rain for most of the mid-west.  That will give bulls a little more hope for a rally and for that matter, any of us producers who haven't sold the crop.  Second, there was very little margin selling if any and the markets closed with some buying.  That could point to higher start on the night session given both situations. 

For us, we want to sell any rally but we want to be prudent about it.  I wanted to sell the market on the current rally before this wash out.  While we did sell some calls, we are not sold near enough and the cash corn market is making it very hard on us to sell anything with the current basis levels. That means we need to be in the futures which is why we sold some calls for now. 

I think we could bounce a little more from here but it is going to take some work to get back to yesterdays limit down close.  Today's low was just 3 cents away from the target formed by the gap we made this morning...unbelievable.  Also, the low today was right on the nine week moving average and the support zone from June 2nd and June the 9th. 

I think the funds have dumped what they needed to and now we may have a quieter time while the weather sorts things out.  For now, my thoughts of a rally point is yesterday's close.  We'll see if we can get back there to test that gap which is also 50% retracement point.  If it gets there, we will be selling.    

Rice - WMP was unchanged and the futures after selling off early rallied to close down on the high and only off 3 cents.  PB is down to 22% so again we are in that area that a bounce should come at some point.

Natural Gas - Crude broke hard today and some specs may find that crude can fall like soybeans did yesterday.  Crude is another market that had gotten too high compared to the fundamentals. 

The low today  in natural gas is major support.  We are on both a support line and the nine week moving average.  PB for Natural gas is at 50% which means a low below today's close, will generate a sell signal.  For us, all signs point lower and rallies should be sold. 

Tuesday  1:30 PM - Another update at 4PM

General Comment  -

The market found no real selling at the close and we finished off of the lows in both the corn and beans.  Even so, down 30 in beans and 3 1/2 in corn is another bad day for the bulls.  What's up?  Well, rain chances are growing but there here some good news.  IF there is going to be any surprises now, it will be against the bears in the market.  The market is discounting the near term rains and the damage is done to the drought bubble that broke yesterday.  Our weather man indicates the chance of showers remains for the next several days followed by heat so if that rain is less than expected, we see a reaction.  If its more than expected, I doubt we break much below today's lows. 

The question for pollination will be how hot can it get during that phase especially in areas which are water logged.  That in itself will have a tendency to keep it from getting extremely hot for a while.  In general, I think the dagger is in the bull and its just a matter of time.  We want to shift to a sell rally mode and not go back to thinking about $8.00 soybeans.  Yes, that can still happen as we have seen late droughts do a real number on the beans and corn and this is still June, but we need to be realistic. 

We sold calls in corn yesterday as a hedge and will sell any rally we can get in a scale up approach with stops in the market being placed as we advance.  This assumes we can rally.  My guess is it will take another heat scare and it will take the funds thinking they missed something to get any big pop in the market.  For now, we have a bunch of walking wounded so a big run will not be easy to get until things settle down a bit....I THINK???  I'll come back with a comment on rice and natural gas along with the new weather forecasts around 4 o'clock this afternoon.

Tuesday  12:30 PM - The last one until the close 

General Comment  -

The market has not been able to rally much in the last hour and the question is not who wants to buy it but who is going to buy it.  Those in trouble are hoping it rallies and "hope" is a very poor strategy.  I would expect the market to not be able rally much but we are getting more buying in general; however, margin call selling at the close is possible and traders know that.  So again, who is going to buy it right now.  It is going to be interesting.

Tuesday  11:20 AM - Another free one 

General Comment  -

I guess we should call this a blog about now.  WOW!!!  We got a terrible fill but what the heck, if there has ever been a fast market it's this one.  We are down 36 as I type but have been down 47.  We are long from 41 down on the day and will risk it to limit down on the day.  It will take a close over $6.90 for me to stay in it and I'll buy more of my original position back if we rally to $7.11.  No, I don't think that will happen but I didn't see it trading at $6.68 today either.  In general, we have hit our objective in ONE day.  Wow!!!  I think the selling will dry up here but be very careful if your taking a shot at it.   Again, I'm out at the close unless we are over $6.90.

Tuesday  10:50 AM - Another free one 

General Comment  -

The trend day we spoke of is indeed underway and it is setup for a DOWN day.  We broke through $7.07 where we sold our last nights buys from under $7.00 and the November contract continues to fall now trading down 27 cents.  PB is now under 50% making this a bear market and a major sell on any rallies.  Will we get one...you bet ya.  But I now give it 80% odds of being just that, a rally.  There is a hard target now of $6.65 and we could be there today.  There is also support on the charts at this level so that is where we expect the bulls to fall back to and hold their position.  Don't buy it until we move below $6.70 and risk 10 cents on a stop.  That is the best I can give you.  If you are short (like us) we take off the position at $6.70 and reverse against the $6.65 target.  The good news, its just about over.

Well...I no sooner hit the save button and the market broke to our level and we did it.  We covered and reversed.  Now we'll see if even a dead cat can bounce. 

Tuesday  9:50 AM - Unscheduled Update 

General Comment  - A free one for you... 

After 20 minutes, beans are in a tight consolidation with a 4 1/2 range.  This sets up a trend day.  A move back into positive territory by 10:30 would indicate a trend day Higher has started which could test the $7.20 level.  A move under $7.07 sets up a trend day down and a move toward the $6.85 level near term.  The funds are not trading yet this morning so we may have a very quiet day and the market stay near the current range.  Right now it trades like every one has been run over with a truck.  The first time that happens, blame the truck driver.  The second time that happens, blame yourself.... 

Tuesday  6:45 AM -

General Comment  -  

Markets worked lower but couldn't hold the break and rallied off of the overnight lows to close down 4 cents on the session.  Corn was down 1.  We covered shorts last night as November beans dropped under $7.00 and I even went back a little long under $7.00 as well (I needed that) because the weather picture is not near as wet as we had indications of on Sunday.  Yes I know last night I said I wasn't going back long, but down 17 over night, under $7.00 and the 6-10 showing what it did, I took a shot.  The 6-10 day has the dome back in it but that is hard for traders to grab hold of just yet especially with a cold front moving through the Chicago area Thursday and Temps dropping back some 15 degrees.  Also, the bulls trading account has taken a hit during the break.

As I said last night, there may be a rat in the wood pile.  In other words, the break we have just had was started by weather, no doubt, but once the selling started it has fed on itself to the point it broke on more on market forces than on weather and it is exhausting the sellers.  This has taken us to a point too low and in fact could have setup a bear trap.  This occurs when a market takes out support and should find selling only to find the selling dry up and the market turn and go back up.

First question...is the market too low?  The answer...it depends.  No I'm not a lawyer but I am married to one so I get this all the time.  If we enter a cooler and wetter time frame, the market is not too low in fact, I would argue it's too high.  So the question is not is it too low for August 30th but... is it too low for June 28th given the current weather model information?  Now here is where the answer gets a little tricky.  I will ask another question first.  Was the market too high last Friday given the current weather information?  Answer...Yep!!!  Obviously, given the current, that means right now, weather picture, we were too high last Friday.  With that said, given the weather picture on Tuesday morning July 5th, are we too low this very minute, today?  NOW THAT IS THE QUESTION!!!!  It is one you must ask yourself the next 4 days.

Bottom Line:  I think the selling is about over.  We might see a little more early as some margin calls are taken care of, one way of the other.  Buyers are not going to rush back into this one unless all of the weather models start to take what rainfall they have in it for this frontal passage, out of the forecast.  Hedgers, we have sold some calls and right now that is the best thing we could have done.  Lets see where the market tends to gravitate today and look at the forecasts a lot closer.  We have 4 days to get ready for the weekend.

Monday  8:00 PM -

General Comment  -  

The 6 -10 day forecast this afternoon is back to the hot and dry drill, just click on the 6-10 day forecast link above.  There is a chance for showers this week and some cooler weather but all in all, today's break doesn't make much sense and tonight, they are still selling.  Early, the market tried to rally on the new forecast but it was met with selling.  Not near as aggressive as last night but still as I write this, we now have a 13 1/4 cent range and are trading on the low.  Corn is down as well.

OK...I'll admit it...I smell a rat!!!  This may be one of those too small of a door with a whole lot of people on the dance floor situations when somebody yelled..."RAIN"!!!  Problem is, the market was too over bought to stabilize and it broke solidly under the weight and there are people still trying to find the exit. This makes it a technical break first and a weary eye on the weather second.  Here is what may be happening.

IF, and again this is a big IF,  but IF the front for later this week comes through with less rain than is being forecast and IF the 6-10 day weather forecast holds to Thursday.  Friday will be the 4th of July a few days early.  In other words, we may be going through a major bear trap.  I'm not going too far out on a limb because again, I must sell this rally; however, we have let the air out and now the market needs to prove itself going on down.

So you will know, I shorted corn today in a Spec position, and I covered it tonight in the overnight just as I started writing this page against a buy order in December that totals 351 contracts.  Even so, I'm not long and I'm not getting long right now, but I'll be danged if I'm going to be short with this thing smelling of a technical correction and not a break in the weather.  Hold on to your hats, the main question is the rain in this system this week and the amount of the coverage.  If it's not there...WOW!!!  That small door works in both directions and with the selling already done, there is nothing but air over the top of this market.  I'm tired just thinking about it.

PS...8:40 PM and I just check the market and beans are now down 12 cents with corn off 4...Blood in the streets!!!

Monday  2:00 PM -

General Comment  -  WASN'T THAT FUN!!!

WOW!!!  What a day and one I'm glad is over.  Please read our Noon update because I don't have much to add except the closes.  Beans down the 50 cent limit and trading down 3 to 5 cents more in the synthetics.  I've decided to pull back up an old archived file on how to get out of a limit move when the market is locked just for some extra reading.   Not that I expect beans to move the limit again any time soon.  Corn finished off of its lows but still down 11 cents for the day.

This was weather.  Plain and simple.   I know that there are some saying the weather hasn't changed that much for this kind of break but believe me it has changed.  Doesn't mean it won't change back but there was a redistribution of the wealth today and you don't move this dramatically without there being a 'global' issue and that is the weather right now.

Last night we wrote about the fact that we cannot marry the long side of the market.  Today's break dropped PB under 50% for corn to 46% while beans, even after a 50 cent move down, has a 56% PB.  The selling was dramatic.  If you haven't read any of our comments, you might start with last nights discussions and read up to now.  I can see the market still bounce back and bounce quite a bit from this level.  Even so, rallies need to be sold in the corn unless we see damage which can still happen.  Pollination hasn't happened yet in the main corn belt and heat can still be a spoiler.  That is why the weather in 6 to 10 days is SO important.  For now, we are sold in calls and will set our sites on selling rallies.  One thing is for sure, this is not going to be simple from here on out.  Longer term, the best money is going to be made on the short side.  There is no doubt about that.  I would just like to be short from $2.80 corn and $9.00 beans.  Oh well, can't have everything and its looking very doubtful that we see those prices anytime soon.

Rice - So now it follows the grains????  New lows and we are set to go lower as the world prices continue and will continue to fall.  We bought it against the 20 PB number but took it off when the market failed on a buy signal.  We are out and not going to trade it right now.  This is no time to be long.

Natural Gas - All sell signals except for the PB which is a little unusual.  $6.96 is the next level of support and if Crude were to top here after a couple of days over $60.00, we could see a nice move back toward the $6.70 range.  We're watching this one like a hawk. 

Monday  12:00 PM -

General Comment  -  NOW WHAT???

This is exactly what we didn't want to see happen.  The market is in free fall with most traders saying "get me out and  I don't care at what price" and the rest saying to themselves, "it has to rally from here!!!"  WRONG...It doesn't have to rally BUT if it does, it is a selling opportunity if the shift in weather ideas holds.  What is so hard about this, is that there was no warning.  There is no real reversal on the charts at all, it is as if we had 4 inches of rain on every dry corn and soybean field in the entire United States on Saturday.

As I write this at 12:00 Noon exactly, here is the dilemma.  The recent weather model puts the dome of heat back into the mix following July 6th.  THAT IS NOT THE CURRENT MARKET OUTLOOK!!!!  This will be a surprise to the market; HOWEVER, I wouldn't trade the market long on this news since the dang thing flips back and forth.  We need to see more of the weather scope the next 24 hours so here is a good time to be out and watching if your a speculator and some corn hedged if your a hedger.  We exited long positions right after the open and then sold some September 250 and 260 calls to get a little protection and for now we want to give the weather and the market some time to settle down.  The close is going to be interesting especially if the beans close back over $7.29 in the November.  On the flip side, if we trade back down to limit down, we should lock there going into the close. 

Monday Morning  8:00 AM - NEXT UPDATE AT NOON TODAY

General Comment  -  Selling continued after we wrote last night's update as the bean market broke and ended down 11 cents after being lower by 18 cents earlier in the night.  This after starting the session up 10 cents.  This type of volatility is to be expected as we head into the most pivotal weekend of the year.  It also could be the beginning of a turn in market direction.

Let me say again, we want to sell this rally and the last thing we want is to get married to the long side of the market given the fundamentals.  One of the hardest things to do is to flip market sentiment.  If you have been riding the bull wave and wanting the market to go up, it is really hard to switch to a short position and hoping the market goes down.  If your a farmer, wanting the market to go down is a totally foreign concept so when the market has been rising it's REALLY hard to sell.  What we have to do is fight our internal desires and just SELL IT when the time comes. 

With that again as our focus, we ask the question, is it time to sell?  I'm not ready to jump 100% into the bear camp.  I will get some corn sales in this week no matter what just because it's prudent.  The amount of sales is still a big question.  If the weather is getting ready to turn wet, which the 6 to 10 day forecast last night said, we MUST get some corn sales on the books.  Will some damage on the beans not be reversible?  Don't know yet, but this I do know, if the weather DOES NOT turn wet, I can always come back in a futures position if I want to go back long. 

Think of it this way.  If you ride a bike away from your house, at some point you turn around and head back retracing the same road.  The farther you get away the more you have to retrace.  For the most part, I think we have come far enough in the corn market that, at some point, we will be lower than current prices.  Once we turn around, we won't see this part of the road for a while.  Keep in close contact with our hotline this week.  If your not in Texas, we'll keep this site updates as much as we can.  Our next update here will be at noon today.

Sunday Night  8:00 PM

General Comment  -  Soybeans opened higher in the night trade but was met with immediate selling and we broke 18 cents off of the highs in just 20 minutes.  We went from up 10 to down 8 and as I write this we are trading down 4 3/4 in November Soybeans.  Corn has stabilized for the moment down 3 to 4 cents.

Weather forecasts were pretty much on target as there was rain for the corn in the western belt but nothing but heat for the central and eastern belt.  The market is still is scare mode.  We need to see some damage reports coming in to really gain traction.  The current heat wave will end this week on Thursday and there will be a front that passes but the rainfall is expected  to be minimal.  Then comes the BIG WEEKEND.  There is no weekend bigger than this one.  The market this week will be trying to determine what trading will look like after July 4th.  That is the focus of this week's trade.  It's not looking at what has happened it's looking at the conditions we will find ourselves in on Tuesday July 5th.  Just write it down and start thinking about it yourself and ask yourself, what are you willing to risk?  For me, it's probably time to lock in some sales in the corn.  We do not want to see a free fall from here and if the weather turns wet...we will have an incredible collapse.  So...this week WE WILL SELL SOME CORN  not all but some. 

Also, click on the 6-10 day link above.  You will notice a BIG difference from Friday's map to this one.  Now before you panic, this is done automatically by computer and it is known to throw out a bad one every once in a while; however, this may not be a bad on and if its right, below normal temps with above normal precipitation is 10 to 14 days away.  We'll wait for confirmation on tomorrow's run.

One more thing...The selling tonight in the overnight session is very aggressive.  The market orders coming in appear to be 70% sell orders hitting the underlying buy orders.  When sellers are this aggressive, it takes lower prices to "cut them off".  Down 4 cents in beans is probably not going to exhaust the selling, at least that is the way it looks right now.  We'll see what it looks like in the morning and have another update here at 8AM.

Friday Afternoon June 24th - 2:00 PM

General Comment  -  What a week!!!  The markets closed right on their highs and look like they are in the starting blocks for a race to higher levels.  We finished 6 higher in corn and 20 higher in November beans.  We also closed right against the highs and IF there is low rain fall this weekend, we could gap higher Monday; however, if there is more rain than expected or a weather model flips over to a wetter pattern, we could start next week in sellers mode and sell off instead. The bias here is higher because several of these models don't flip around like the American model does.  In general, the trade today was a pointer day.  We stayed between the high and low price of the first 30 minutes of trade all day until about 40 minutes before the close when the market moved into new highs.  We didn't hold the higher move at first and sold off only to return and then make new highs in the very last minute of trade.  That is our pointer signal.  A consolidation day closing outside of the range in last period with a new high.  It points higher for Monday but there is a lot of things which have to hold for that to happen.

There is both good and bad about today.  The good part is we held the higher open and found traction.  It wasn't much but it was something.  The bad thing today was we didn't really move that much higher than the first 30 minute high.  I had hoped we would moved over the $7.70 level at the close in November but that didn't materialize.  I had wanted a 25 cent higher close and got 20 cents with a new high so I guess I shouldn't complain.  In any event, Monday will be its own beast and once again we have placed our bets going into a weather weekend.

Also, check out the 6-10 day forecast as it has above normal rainfall for the areas just north of the corn belt with much above normal temps.  The 8-14 day forecast has the rain fall back to below normal with above normal temps.  This would go through July 8th.  So no sign yet of this weather condition changing for the central and eastern corn belt.

Rice - Still trying to close the gap.  If it turns over here, we have another $1.00 down in the futures market.

Natural Gas - We need this correction and are getting nervous.  PB is down to 67% and is in the range where corrections end.  It is possible we aren't correcting but starting another leg down.  That would be confirmed if PB dropped under 50%.  Buyers need to be watching carefully so we don't miss this break if the down turn is going to be short lived.   Crude looks like it wants to see what the 60.00 range feels like for more than 10 minutes and that will keep the Natural Gas from breaking very far. 

Friday Morning 7:30 AM

General Comment  -  Well, it wasn't up 20 cents in beans last night but it was up 12 cents, completely wiping out the loss from yesterday.  Again, you need to read our comments from last night since I discuss an expansion market scenario for beans.  Today's trading activity is going to be very interesting.  As I type this, it appears that the current activity on the weather map has less moisture than expected.  The light showers for Indiana for last night never even showed up on radar and the showers moving northeast through Nebraska and Iowa are not generating huge rainfall amounts.  Of course, it really isn't supposed to be heavy until later today and then the best chances for northern Illinois is for Sunday. 

Lets go back and consider today.  Remember our discussion of traction from Wednesday Morning , well today has the same setup so we will be following the market close today to see if we get any traction and follow through from a higher open.

One more thing, if you look a bean chart, you will see yesterday's close came down and closed the gap in the market.  A move to new highs now would be very bullish.  The long term weather forecasts are holding in the heat so it all depends now on the amount of rainfall in the next 48 hours. 

Bottom Line:  There is no sign to an end of the main trend which is higher.  We lifted hedges that ended up being on for just one day and we are really glad we did.  Today we will look for a trend day but it may not happen as it could be a very quiet day once the market opens.  I think the rain this weekend may be completed discounted by the close today with the heat starting to bare down on the Mid-west and especially Chicago...well, at least for 2 days anyway.  Traders at noon will be walking outside into 98 degree heat and some will turn right around and go buy more. 

Thursday Afternoon June 23rd - 1:30 PM

General Comment  -  Gosh, I hate to keep blowing my own horn but...what did we say.  We thought we would get a break today and be able to lift off hedges we put on yesterday and that is exactly what we got.  The close indicates the market is setup for a surprise as we saw good selling all the way into the close in the beans.  Corn stood like a rock and from what I can see, the corn is what is really going to get the rain.

Was today's break a buy??  Well, I'm not going to get too much of a big head here to not know things can go wrong with my plans for the market.  So, it is important to look at this market in depth and make sure we have a game plan for the next few days and into next week.  Let me start by saying, I covered all shorts today on the break buying in the last 15 minutes of trade.  That puts me back long for now with about 6 cents in my pocket as a cushion.

Let's start with the weather.  The charts show rain in the northern part of Illinois over into Iowa.  The question is how much.  But before we tackle that, lets get a time frame.  First round of showers is Friday (tomorrow) and Friday night.  Logic would say that the radar tomorrow afternoon going into the close will tell part of the story.  Now with that said, the next round of rain comes in Sunday.  The American model has the rain at 1 to 3 inches over 60% of Iowa.  THAT IS A HUGE RAIN EVENT!!!  The other models have scattered rain with maybe an inch in 25% of the areas.  That is a huge difference.  THEN to top that off, here comes a bigger heat dome back into the belt going into Mid-week right into the July 4th weekend; however, the holiday weekend is also expect to see more showers around then the middle of the week.  How much rain is already being debated but one weather service has already come out (they did it today just after noon) and said big rains are on the way for the July 4th weekend followed by a return to the heat dome following that rain event.  There you have the weather.  With the constant differences in opinion, the best thing to assume is that they both are wrong and the truth lies in the middle; however, I can tell you the American model has just been wrong most of the time on rainfall amounts.  So, I would expect, given the heat dome and the flip flop characteristics of the American model, we will come in Monday with less rainfall than the market is expecting at tonight's close; however, tomorrow will be influenced by the expiration of options and the shower shield developing throughout the day on radar.

Now lets look at it technically.  Today's Percent Bullish on beans is 77%.  This is a huge correction of the PB.  Last night we were at 82% and now we drop back into the 70's.  This is a classic expansion setup.  The corn is at 66% which is not an expansion setup but a continuation bull market setup.  Both indicate a correction HAS occurred and the over bought conditions we talked about are gone.  At the close of today, we were in a down move which took us below the first 30 minute range which by the way, held for most of the day.  While this is not a trend day it is still a weak close and indicates the sellers are currently in control.  The trend is still higher and all indicators are in bullish mode except for extreme short term indicators such as on the 30 minute chart. 

Bottom Line for tomorrow:  Look for the market to start weaker unless the American model flips back drier in the morning run.  Once we trade for 30 minutes, if we are not at the top of that range, set a stop to buy it if we make new highs.   If we are at the highs of the day after 30 minutes, wait for a pull back and then set your stop if we make new highs.  AGAIN...this is a high risk trade and it is very risky trading futures.  You can loose more than you invest if you trade futures.  One more thing, if you are filled and it is a looser going into the close tomorrow, get out of the trade.  DO NOT TAKE A LOOSER HOME.  Also, do not follow this process if the market opens sharply higher in the morning.  (Over 10 cent higher in the beans).  You will have to use a catch up system to buy it and not one that buys new highs on a day where we open that much higher. 

Rice - No bounce even with a PB of 24%.  I guess it need to go below 20% to make a low.  Its still too early to know, but I think we are close to a bounce.  It may not be much of one.

Natural Gas - With crude soaring and touching the magic $60 mark, gas consolidated its break.  We may still have a little lower to go before we need to be on the buy side.  Let's hope we can move lower in the next few days.

Thursday Morning - 6:30 AM

General Comment  -  The overnight market was quiet but finished off of its highs.  The disagreement in the weather models continues with the American Model showing higher rain fall than the other models.  Another thing of interest is that the rain for Sunday in the American model seems to be more to the west.  All of the models show some rain across Illinois but coverage and amounts are in question.

Please read our comments from yesterday afternoon as nothing has changed.  We are taking some pre-caution here and have done some selective (willing to be taken off quickly) hedging.  Again, this is just short term more than likely because we think the market will not like the amount of rain we get over the weekend and the next two trading days, we may do nothing more than alleviate some of the over bought conditions.  We will be quick to lift these hedges and in fact may do so today if we can get a nice break.  Friday at the close, we will be in protected situation but it will not be short futures.

Going in to today, I am looking for another consolidation type day with the high and low being made in the first 30 minutes; however, the overnight market has the day session pointed down in the early going.  If we trade out of the first 30 minute trading range consistently the rest of the day, it could be a pointer day of where the smart money is going.  I use the term loosely.  They aren't weathermen any more than I am.  The bottom line for today is that a reversal could get some traction so, IF we trade into the mid part of the session at lower levels, AND IF the market turns and rallies, it will be significant IF the market closes near the highs of the day.  IF we close near the lows, then we may see another day of lower levels on Friday.  I think that is enough of IFs.

All of this will build up to the close for tomorrow which will be the main event.  Again, everyone will cast their bets for Monday's reality in the next 36 hours so step on up and lay your wager down.  I'm going out on the limb and say that the close Monday will be higher than yesterday's close.  Just remember, there is a BIG risk in trading futures this weekend and past performance is no guarantee of future performance and that you can loose ALL of your money and EVEN MORE trading futures.  There... I think I covered myself with that last line!!! 

Wednesday Afternoon - 1:30 PM

General Comment  -      HERE WE GO AGAIN!!!      AGAIN!!!

If you haven't read my morning comments, scroll down and read them first.

The market opened higher but there was no traction and before the day was over we had a Trend Day Down in the corn and with an almost in soybeans which don't look much better sitting with another spike.  I am in a position tonight I didn't expect going in this morning.  I am out of all longs and hedged on some selective corn positions.  In other words, I'm short in futures where I can turn on a dime.  I did not buy puts nor do I recommend it yet.  I would not sell cash either but again, WE MUST SELL THIS RALLY!!!

Here is what's going on tonight.  The new forecasts from the 'always wet' American model has more rain and cooler temps in it for this weekend into Monday.  Again, this forecast may not hold up with the other weather models which run later tonight; however, the market doesn't follow the other models very much and looks to the American model.  To help you understand this, think of it like the US Governments Rice reports.  I use rice because the government is usually much better in the other grains.  In the rice...it's just a guess or it's the mills spewing garbage.  OK, no more mill bashing today.  Point is, even if the government report is all wrong, the market trades on it.  Same thing with the American model.  It might always be wet (literally) but it's what the market looks at and trades because it's the forecast that every DJ and TV weatherman who isn't a meteorologist, rips and reads over the air waves.  Tonight, there will be a lot of talk of possible drought ending rains for part of Illinois. 

Now here is the scary part.  Even a blind squirrel finds an acorn now and then.  It is possible that the American model will be right.  The other models all show showers this weekend but they are currently showing very small rainfall amounts.  Who is right?  Well, "place your bets" is all I can say.

We took home some hedges tonight for a couple of reasons.  First, there was no traction in the market today which indicates that damage is not occurring to the point that the market hasn't already figured it in. Second, PB in soybeans is 82% and the 30 minute chart gave sell signals today indicating that condition might be corrected in the next few days.  That alone is reason enough for me to sell it.  Thirdly, it's June 22nd.  We still have 21 days before silking in the mid-latitudes of the corn belt.  A good rain in the Mid-west will send corn down like lead weight. 

In other words, there is risk to being long tonight when you consider the next few days.  When there is that type of risk, I want something sold I can get out of quickly and that is the futures.  We'll see how the runs look tonight and comment further in the morning around 8 AM.

Rice -  PB is now at 24% with the market down 12 1/2 today in July. We could hit a low point any time but so far there is no sign of a temporary low.  With the world price down and no sign of Thailand doing anything but lower their price, if we do get a bounce, it probably should be sold until mid to late July.  That is when we start looking at the monsoon to slow down and maybe even fail. 

Natural Gas - We inched a little lower today but all eyes will be on the inventory numbers tomorrow. Here is where we are.  PB is out of the 80% level sitting at 70% tonight.  The modified nine week moving average is at $6.89 and the strength index for the up move is turning over at 39% when 40% is usually where the market stops an initial move.  All in all, we could correct another 20 to 25 cents over the next few days to weeks and it should be looked on as a buying opportunity at first.  By that I mean, we would buy it in the zone and if the market continued lower, we would buy puts of sell futures on a major sell signal. 

Wednesday Morning - 7:30 AM

General Comment  -      HERE WE GO AGAIN!!!  

Markets were sharply higher overnight with beans up 16 to 18 cents and corn up 4 cents.  The rain in the forecast is gone and the 8 to 14 day forecast shows no rain in sight for the driest areas of the corn and bean belt. 

In the recent overnight rallies like we saw last night, the markets have not found traction the day following and we have seen the markets back off big time from such a higher open.  If we find traction today, I'll be ready to say, we are getting damage to the bean crop that probably won't be corrected.  So, with that said, in my opinion today is the day we see if damage has begun.  If we don't hold the gains we make early, then we will fall back and wait for more time to pass.  One more thing, if we open 15 to 20 higher and end up with a trend day HIGHER, look out.  The market will have told us it is going a lot and I mean A LOT higher and quicker than we thought.

I have learned that just when I think I have it all figured out, the market proves I don't have a clue.  It works both when I'm right and when I'm wrong.  But when a market goes in the obvious direction that we think it should go it will do it in two ways.  First, it will go sooner than I expect.  Today's move is sooner but I'm going with it.  Second, you won't be able to catch it.  That could be what happens here and could start today.

The weather pattern is indeed very much like 1988.  That is the year we last saw a major drought in the Mid-west.  While the western corn belt is in much better shape than the 1988 year, if heat establishes itself for the first half of July over the western belt, there is NO WAY they hold trend line yields.  Right now, the forecast for the first 5 days of July is HOT AND DRY.  We will be following it very close; however, again I say, we want to sell this rally so don't get too enamored with the long side of the market.  There is still a long way to go and a lot that can go wrong with the bull side of the argument.

Tuesday Afternoon - 3:00 PM

General Comment  - The markets were a little more outside of their normal range of things for the day following a consolidation day.  The weather hasn't changed but there is some signs of more normal rainfall for parts of the corn belt in the next few days and then more heat next week.  Looks to me like the market is telling us it can't go higher until there is damage and my guess is that could give us a few days of doing nothing but scaring both the bulls and the bears.  Today's close is not very strong but all we did is close back in the middle of the first 30 minutes of trade.  The 6-10 day tonight has nothing new and there is a lot of talk about the dry spring in the Mid-west.  I look for continued volatility UNLESS there is surprise rainfall event which is always possible.  Look at our radar link.  As I write this there is a cell of rain off to the west and it could move into Iowa but it looks like it is falling apart; however, I've seen surprises come from cells like this so keep a good watch on it.  We'll look at the overnight trade but expect we are in for a few days of doing nothing waiting on more news of weather and damage.

Rice - WMP down 21 cents.  New lows for this move today and with the WMP down, we should see more pressure in the morning.  We got good sell signals (read below) and want to see how we treat the $6.80 level before thinking about lifting any hedges.

Natural Gas - We have really gotten a good break here and its better than I expected.  Near term, we will see if this one can push toward the $7.20 level in August which should provide some major support. 

Tuesday Morning - 8:00 AM

General Comment  - Markets were lower overnight suggesting a back up day where we get some of the over bought conditions out of the market.  We are way over bought in beans but not so much in corn.  A look at the chart shows beans are clear sailing in new contract highs which corn has rallies right up to its contract high and is now going to try and close the gap it made yesterday.  That would take a move down of 6 cents and as we look at the charts and weather, is a buying opportunity.

Crop conditions were basically unchanged with still no sign of damage so we remain in a weather scare market and we want to use weather scare market rules which means we will not sell the market lower today UNLESS at the end of the day we are in a "trend day lower" situation.  I don't expect that going in  and would look for a sideways day where the high and low are made in the first 30 minutes with odds favoring the high of that range taken out later in the day.  All in all, once we open today and the market trades for 30 minutes, I expect the market to go fairly quiet unless there is a major change in the weather forecasts.

I know there are some weathermen (or ladies) talking about showers but there is nothing on the horizon that is going to break this current weather threat to the mid and eastern corn belt.  Given that, the best readings for crop conditions on the year were probably last night and from here on out, look for them to deteriorate. 

Bottom-Line:  We are in buy mode on this break and will look at the market going into the close to determine if we buy more.  Sellers in corn should sit on their hands for now.  The basis is so bad we are just about 10 cents over loan.  With the market gapping back down this morning, there is no reason to be selling today UNLESS we see a major trend day start and I doubt that happens.

Monday Afternoon  June 20th - 2:00 PM

General Comment  - Well, interesting day.  Again, please read our comments regarding a trend day if you haven't done so already.  Notice Friday was a trend day and what happens today?  The market basically stayed within its first 30 minutes of trade.  Yes, beans made a new low for the day after the opening 30 minutes and corn made a new high late in the day.  Still, by ALL definitions, this was a sideways consolidation day after the gap opening higher and after the trend day higher on Friday.  What this means is that the market didn't trade to where it closed today but gapped there.  It is still a strong day but the buyers were not so aggressive as to buy all day long and by that I mean over power the sellers all day long like they did last Friday.   

Tomorrow is an open day where we could move in any direction.  If it is a break, it is a buying opportunity unless it ends in a trend day DOWN.  That is what we are now watching out for.  The weather remains as fickle as ever with the American Model now showing the heat dome breaking down 9 days from now.  Of course, it will probably flip back to the dome idea in the next few days and that will be like poring kerosene on a fire if it does.  For now, there is no sign of a top or that this move is about to end.  I will say this, PB is now over 80% in beans and corn is up to 75%.  Even so, in weather markets, I've seen PB over 90% before a top.

OK...IT'S TIME TO TALK HERE!!! 

Our purpose in being bullish is that we want as high a price as possible to sell our 2005 production.  We are not long the world here and don't want to be.  I want this market sharply higher for one good reason...TO SELL IT!!!  Yes, we have bought back about 50 to 70% of our last years production but now we want to make sure that is never becomes a looser.  With this in mind, we will be rolling up options here to take profits off of the table.  The main point is this...GET READY TO SELL...especially, if the weather changes quickly.  Do not get married to a long position or get to the point where you just want it to keep going higher.  We must sell this market right and lock in some good profits for 2005.  That time is coming, but its not here yet.

Rice - Rice rolled back over to the sell side today giving sell signals again after just two days of buy signals.  If we make a new low, we should test the $6.85 level in July before it expires.  I have seen this before where the market gave sell signals but then failed to make new lows.  Remember, the market doesn't make a "V" bottom so if the low holds here, the sell signal of today could fail quickly.  It will be interesting to see if rice can keep selling off with the other grains headed higher.

Natural Gas - One of the weather models took some heat out and that may have let the air out of this run.  PB was up over 80% but tonight its back to 76% which is exactly how it works if the market is getting ready to go into expansion phase.  A move into new highs in the next few days will send this market toward the $8.20 level.  Right now we enter no-mans land waiting for the market to tell us if this is a top or just a pause. 

Monday Morning  - 8:00 AM

General Comment  - Markets held their sharply higher moves overnight.  Traders in corn are baffled as the crop doesn't show any damage as of this time.  The problem is that the new varieties used in the Mid-west have never been through an extreme heat period during pollination.  Even corn in the west which is looking like a great crop coming, could see major drops in yields if this heat moves in and camps for two to three weeks while corn is silking.  We in the south know that when you make a variety that puts all of its strength in making ears, and then it gets too hot, the plants ability to produce plummets.  That has not happened yet in corn but if it stays like this for 4 more weeks, a trend line yield will be out of the question and a 50 to 60% cut in the ending stocks becomes extremely likely. 

Here is the thing to look for.  A surprise weather RAIN scare.  All it will take now is for a forecast to come out moving the heat south and allowing rain to come back into the Mid-west to put the breaks on and reverse this move up.  At $2.80 in March corn, we will start selling some of our production.  We have no choice given the possibilities still for a huge corn crop.

Sunday Night  - 8:00 PM

General Comment  -       Here comes the heat!!!

As I write this, soybeans are up 22 cents and corn is up 4 cents in the overnight session. 

The forecast today has shifted much hotter and for a longer period of time.  What is crazy about this move is there has not been any "surprise" rain forecasts.  Usually we get a "wait a minute, its going to rain this week", but that is not occurring.  All of the weather models are now in agreement that this next weekend will be hotter and there is no sign of significant rain.  Does this mean damage?  IF and again it's a big IF, these forecasts hold, the beans are in trouble and the eastern corn belt could also be in trouble.  Here is the other thing to remember, the corn was planted early and if this heat holds, we could see more damage then currently expected in the western corn belt. 

Friday June 17th - 9:00 AM

General Comment  - There is now a weather scare in our weather scare!!!  This mornings runs are showing more rain out 10 days from now than they did last night.  This could indicate a change in the weather pattern but it is still a long way away.  The bears are talking it up while they dole out margin.  As for us, we know that this could be the end of the rally and indeed the beginning of the top; however, it could end up just as another scare to the end of the big weather scare.  I think you get my point. 

We are going to be prudent as we are hedgers not big speculators.  We are taking profits before this weekend and IF we go down on the day, assuming we open higher as the over night trade suggests,  we will exit all positions and see how the forecasts develop.  Long term we are not ready to give up on the drought scenario but we are willing to be out of it when things look uncertain.  If the rain doesn't develop in larg amounts, we will continue higher.

Again for today.  We are taking off  some of our long positions and if we start to see a reversal, we will exit all long positions.

Thursday June 16th - 2:00 PM

General Comment  - Beans down 2 with Corn up 2    Please read this mornings update...it is very much right on for today's trade and for that matter the next several days.  Remember we wrote about Trend Days and the fact yesterday qualified.  What happens after a Trend Day???  Usually we consolidate with the market staying close to the highs and lows of the first 30 minutes.  That is exactly what happened today.  Now what will happen tomorrow?  Don't know but I have concerns as to how much of a sell off we can get with the weather charts looking like they do.

The forecasts are for a chance of some showers next Tuesday and Thursday but unless I am reading the charts wrong, the rain totals will be less than 1/2 inch both days.  LESS THAN 1/2 INCH!!!  If this is the scenario for the next 3 to 4 weeks, we are in for a wild time down on the farm.  That is if it's located at the Chicago Board of Trade.  Our weather man is constantly pointing out, at least the last 4 or 5 days, that there is no heat dome building in the Mid-west.  That these is not any sign of prolonged heat.  I'm sure he is right but the problem is there is not enough rain in the dry areas to sustain a NORMAL July. 

We are taking another shot at the July options just because they are cheap when it comes to time.  We are already long 210 July calls and with the July 220 call trading with 6 days left (OK...5 1/2) for only 2 cents of time value, we figured it was chap and so we bought some of those today.  Otherwise we remain very subdued in our approach still holding long positions and believing we will get a chance to lock in higher prices for new crop.  IF, and again it's a big IF, we take out today's high tomorrow we could push substantially higher.  If that happens early, watch out.  We could be setup for a reversal depending on how the weather comes in.  Remember, that 1/2 inch of rainfall can become 3 inches.  Forecasts tonight and tomorrow would need to agree with the current trend to hold higher tomorrow at the close.  With the weekend ahead, we could see a direction path that is either way or in fact both ways.  It is totally up to the weather forecasts.  With all of the swings going on, we would still follow the advise given weeks ago on the Weather Scare Markets Explained  page. 

Rice - Well...we might have made a bottom here but if we have, how long will it hold.  I'm not ready to call it yet but the action today, while not indicating any buying, indicated a lack of selling.  I would prefer the former if we are going to rally very much.  At some point, rice will get a draft effect from the other grains but my guess is not until we really break out in the corn and wheat is following as well.  At some point, the rice will rally with the rest of the floor if just for sympathy and nothing else.  PB remains below 30 tonight so again, a nice pop is possible anytime.

Natural Gas - Gas inventory increased at the lower end of the expected range.  This is a surprise and the market rallied again on the news.  We still have a hard target of $8.00 but if I needed to sell anything, I would start selling just before we get to that level.  We need to buy some more but I think we'll get our chance a little lower than here. 

Thursday June 16th - 6:05 AM

General Comment  - Markets continued to move higher following yesterday's trade with beans up 6 and corn up 2 in the overnight session.  The 6-10 day forecast shows the high ridge re-establishing itself big time over the central and eastern corn belt with below normal rainfall and above normal temps to continue.  It shows the western belt and plains with above normal temperatures but normal rainfall.  The 10-14 day forecast shows the same thing.  IF this all comes to pass, we could find ourselves around July 4th, in a screaming damage driven bull market for the beans with corn getting dragged higher.  NOW I SAID IF!!! 

I look at today with mixed emotions.  It looks like we will gap higher in the beans but I wonder if we can hold that gap.  We had a small gap yesterday which forecasts a move to $8.00 in the July.  A gap today would forecast a move toward $8.50.  Meanwhile, corn is against major resistance.  I have been saying we can't take this level out without damage.  I may end up being wrong about that as the market is looking more and more like it wants to break out.  We could consolidate more than is really expected from the over night trade but the facts remain, the risk is growing for damage to the crop.

Lets look a little more in depth at the risk.  If the US Corn yield is trimmed back to 125 bushels an acre and I know that is a big, big, big, cut but IF it were to drop to that level.  Corn would probably go over $4.00.  With that said, the market is at $2.46 in December.  The question is NOT, "has it rained or will it rain?", the question is WHERE IS THE RISK...Markets move because of risk concerns caused by the weather not because of the weather itself.  Think about that.  It was raining in April and the market was going anywhere.  Why?  No risk!!!  If it rains right now across the whole corn belt, the market is going to drop 30 cents in corn and $1.000 in beans.  Why?  The risk changed. When you think of it in those terms, you can see why corn is up 20 cents off of its lows with no damage.  The question to risk analysts is simple, is 20 cents enough given the current risk?  The answer is absolutely NOT!!!  In beans, a drop of yield by 5 bushels an acre would wipe out the entire carryover number.  My guess is soybeans would be above $13.00 and that is on less then a 10% reduction.  AM I SAYING THAT IS GOING TO HAPPEN?  HECK NO!!!!  I'm just pointing out the RISK. 

I write this to give you my opinion of why the market is moving the way it is when no real damage has occurred.  The fact is, when water starts rising for you house, you start sand bagging long before the water gets there.  If it stops rising before ever getting to the sand bags, GREAT!!!  But if it doesn't, you have a head start on keeping the water out of the house.  That is exactly what is happening in the market today.  The water is rising but it is still along way from the house.  Some traders have begun putting out sand bags.

Wednesday June 15th - 1:45 PM

General Comment  - Corn up 5 1/2 cents with new crop soybeans up 16 cents. 

They took the heat out of the market and still we are sharply higher again today.  A new forecast out shows the high over the Plains dipping and if it dips far enough, we could see some rain come around the top part of that high and hit the eastern corn belt; however, it doesn't look like much rain as the jet stream is not getting much moisture to carry north.  Be sure to check out the 6-10 day link above.  As I write this, I haven't seen it yet.  It will carry some weight in what the market does tonight.  OK here is the bottom line:  Soybeans closed into new high territory today and is setup for a major break out.  Today's action was strong but it could have been better.  What we are looking for is trend day's to give direction.  I have made an explanation of this concept but before you click on it, if you are on a slow modem, there are two graphs on the page so give it time to down load.  It should take no more than 90 seconds if you are still on a 56 K modem. (I can't imagine that anymore)  This page is made from today and explains what we look at with the term - "Trend Day."

I didn't trade very well today as the market looked like it was reversing and I dumped long positions.  Then the market turned back up at the very end rallying in the last three minutes and ending up pretty nicely.  One thing is certain, the more volatile we get, the more "noise" we have in the market place.  That means we are trading in wide swings and that is making it harder to trade and there are going to be some bad days for both sides of the market.

Based on trend day analysis, since I just talked about it, tomorrow may be a consolidation day with the market trading in its open 30 minute range all day.  If so, its a buy on the close tomorrow with all other things holding constant. 

Again, sounding like a broken record, this is a SCARE!!  I expect the crop conditions to be better next Monday than last week and that will keep the market in these wide swings as the bear say, "there is no damage yet."  And they are right.  If it were to turn off wet next week, we would crash in a major way.  This is what makes the market and the world go round.  The uncertainty of the future.  For us, the trend is up, the weather trend is dry, and the demand in these markets is huge.  We'll stay on the long side for now.

Rice - PB is at 26% tonight and again we should be close to a low.  The market finished down 2, right on its high of the day after being 12 cent lower early.  This is classic spike and rice likes to bottom and top on them.  I won't go out too far on this limb but the chart tonight looks like a low was put in today.  We could have a 20 to 40 cent bounce from here.  Tomorrow will be important.

Natural Gas - $8.00 in July is still possible from the charts.  We are over bought but not to a point where a correction MUST occur quickly.  We could rally another 20 cents before hitting that zone.  Crude oil did break off of its highs but we are starting to see the market up on something else other than the current fundamentals.  What?  Don't know but why aren't the commercials selling the tar out of this thing.  I see $60 crude dead ahead based on the charts.  Why?  I DON'T KNOW!!!  IF you do, let the rest of us in on it will you!!!

Wednesday June 15th - 6:45 AM

General Comment  - The markets started just a little higher in the overnight session but then moved moderately higher in last hour as new weather model runs continue to show hot and dry conditions for the corn belt ahead.  Beans closed 7 cents higher and corn up 3 cents for the night trade.  In fact, soybeans moved through the $6.96 level with a high of $6.97 1/2 for the night run; however, the market closed with a bid at $6.94 1/2 and an ask at $6.97 1/2 for a mid range price of $6.96.  With this action we should see corn 2 to 3 higher on the open and beans up 5 to 7. 

Our concern continues to be a difference of opinion in the weather models; however, this mornings runs are bringing back the idea of a returning heat dome 10 to 12 days out.  While the current heat ridge will only last a couple of days over the corn belt and then be pushed back west.  It appears that may be for only a couple of days and then the heat dome will move back over the corn belt.  If this is right, it sets us up for a heat dome pattern that will dominate for several weeks shifting back and forth as as weather systems approach.  These types of domes produce very little rainfall so we might assume that rainfall will be below normal for the next 3 to 4 weeks while this weather feature dominates the Mid-west.  If heat really starts to move into the area, the lack of rain coupled with no reserve soil moisture and heat, will stress the corn quickly and lower yield potential.  AGAIN, we are only in scare right now but could really get to be a good one.

The charts are also looking bullish this morning. If we can breakout in the beans, we could run quite a bit.  Corn is still lagging but shorts in the market must be getting nervous.  It still take a move over $2.28 to signal a breakout but after last nights trade that is only 5 cents away and with the small specs as short as they are in this contract, we could have some extremely volatile movement in the next few days.  We remain long.

Tuesday June 14th - 2:30 PM

General Comment  - WOW!!!  We started lower but the market quickly, and I do mean QUICKLY, reversed and moved sharply higher with soybeans trading 18 cents off of their lows in a matter of minutes.  The high and low of the day were made in the first 15 minutes of trade.  The market pulled back and actually went back down trading down 16 cents form the high but then the market rallied and finished up 9 cents in beans and 4 cents in corn.  Is this the beginning of a major breakout?  Well, it could be but I have some concerns as we go into tonight's trading session.

Apparently, a weather forecast came out indicating that the high pressure area or "dome" which would have a lot of heat in it, was going to establish itself and hold for the next 10 days.  This forecast is from the American Model which is the one used by most TV and Radio stations for their forecasts and is the one you link to above.  One of the reasons this model is used more is, it is run more often and another reason is it's the oldest.  There are 6 major weather models we try to follow and we also have a consultant weatherman who sends us emails and does his own forecasting.  He is usually right by the way.  Anyway, the other 5 models are not showing this 'dome' to hold for a week but only 2 days and that will be the upcoming Sunday and Monday.  IF they are right, then the rally we saw today will be short lived and we will see the market correct back into this sideways trading range again.  IF they are wrong and the American model is correct, we are on the verge of a major breakout.  We will keep close watch on the forecasts as again, that's what is moving the market NOT what has happened or even IS happening.  A close over $6.96 in July beans is a major MAJOR buy signal.  A close over $2.25 in the July corn is also a major buy signal in the corn; however, if beans move over their breakout point, I'll buy more corn.  For now we remain long calls as stated below.

Rice - We hit our target mentioned two weeks ago on the phone update and on the 6th here on the net.  PB is at 28% which is low enough to indicate a low is approaching.  We have several weeks to go before getting to the main monsoon weather season for Thailand.  A shut off of rainfall then could have an explosive rally for rice as both Vietnam and Thailand would be affected.  The other thing to remember, is that there will be some "drafting" effect if the grains move sharply higher.  It will take damage to the grains before the rice moves higher in sympathy. 

Natural Gas - Nothing new here today.  Market is accepting this level but the next two days of reports will shape the near term trading range.  We need a break to get some more bought which cold happen if this high pressure dome doesn't last but two days.

Tuesday June 14th - 6:30 AM

General Comment  - Night trade finished lower with beans down 4 and corn off 2 cents.  The radar is mostly clear as the rain has moved away from the Mid and Eastern corn belt.  There remains a chance of more rain through tonight but again, it is forecast to be minimal.  Then comes cool temps for 3 days and a warming trend.  No rain is expected now for several days with even the 14 day forecasts showing below normal rainfall and above normal temps.  So the question will be how hot does it get and when will they need more rain.  Next weeks crop condition reports should indicate continued good progress and conditions for the crop.  So I expect the rest of this week to be rather slow in nature with a general sideways bias.  No major sell off is likely with the forecasts still looking like they do and we are over two weeks from July 4th and that is considered  major pivot date.  Look for lower trade today but sellers should not be that aggressive if we are 5 to 7 cents lower in the beans and 2 to 4 cents lower in the corn.  Right now we are in no mans land.  The recent rains can get this crop by for a couple of weeks as it is just knee high in the central latitude but in two weeks, its going to be needing a drink big time. 

Now to our July calls.  We bought about 50% of our base position and the options should go to 100% intrinsic value very quickly.  I expect July corn to hold $2.10 through next Friday and if it doesn't, we will be glad to get out with only a few cents lost in the trade.  As of now, I expect to exercise the options and take a long futures position  I will say this, the next two days will be hard as I try to decide if we should add.  That is the only question.  Do we want more July calls with just 7 or 8 days left to trade them?  The good news is we don't have to decide right now.  I expect to look at it closer Thursday when we are clear of the rain chances.

Monday Night June 13th - 8:00 PM

General Comment  - The night trade has started lower and I would guess it is because of the crop condition report which shows the corn and beans both improving over the last week.  This is to be expected as we still have not had any real heat on this crop and it's still 8 to 10 days away.  We in the south must remember that 88 degree's is above normal in Iowa this time of year.  Chicago's high on Thursday of this week is forecast at 68 degrees.  Like I said before we have some time, but things are expected to change in the next 10 days and the longer term forecasts are not indicating 68 degree's for a high very long.  One week from today 84 is forecast for the high and it just gets warmer all next week.  So again, don't get in too big of a rush.  We have some time to accumulate some positions as we get ready for the turn at July 4th.  There maybe some fireworks in grain prices about the same time we see fireworks in the sky OR we may see a BIG weather DUD if things change AND they can change!!!.

Monday Afternoon June 13th - 2:20 PM

General Comment  - We finished higher but off of the highs.  Corn held up pretty well with across the board selling only in the last two minutes keeping us from closing right near the highs.  If you read our comments on June 9th, we stated then it will take damage to make new highs and we still think that is the case.  We also think there is a good chance we are going to trim the 2005 corn and bean crop because of weather problems.  We bought some calls on the open and only time will tell if we are right or wrong.  Forecasts again are mixed but only on how hot it will be not on the fact the Midwest will not get any appreciable rain over the next 10 days.  Here is the 6-10 weather forecast and it is a WARM one.  If this pattern holds into mid-July, we will get the chance to sell at much higher prices.

The action today is still typical weather scare action and not weather damage action.  The market 10 minutes after it opened was trading at $6.82 in the July.  We closed at $6.80 1/2 so you can see the market really didn't finish very convincingly from the opening few minutes.  In fact, I would say 90% of the trades today were at higher prices then where we closed.  Typical scare type trading.  If we were seeing damage, the market wouldn't be closing closer to the lows than the highs.  That type of market opens uneventful and then finds absolutely no selling.  May we will be lucky enough to see that type of action this year!!! (Sorry Midwest farmers)

AGAIN, we are not crazy bullish.  We are not even long that much right now as I think we have plenty of time and want to keep the powder dry; however, a look at the corn chart shows a bullish setup and there is little reason to be selling cash corn at this price.  Soybeans have already risen to a point where there is some risk in prices for hedgers but the fundamentals are tighter in beans as well.  We need to stay right on top of this one near term.   A move over $6.96 in July is a major break out and will bring in HEAVY buying.  We may still be a week away from that happening depending on the weather forecasts the next few days.  Remember, in a scare, we trade the forecasts.  That is what we are doing right now as we go from forecast to forecast.

Rice - No comment.  I still see $7.00 in July and there was certainly no reason to think other wise from today's action.

Natural Gas - Here comes the heat.  Crude was strong as well so couple those two things and the specs are back in here buying with a vengeance.   July may get to $8.00 on this move.  In fact, I have an $8.21 objective but it is a weak target.  A move over $7.40 will establish the $8.00 target and that is a stronger objective with higher odds.   

Monday Morning June 13th - 10:30 AM

General Comment  - Markets are strong this morning as traders realize they could be on the verge of some very hot and damaging weather.  Corn remains the lager here and will until the trade sees damage for themselves.  If the weather turns off wetter later this week, the bears will be right but the odds are not in their favor right now.  We bought the open and will remain long for now.  Be sure to look at the link and read our comments from earlier this morning if you haven't done so already.    Map for Wednesday June 22nd.

Monday Morning June 13th - 7:15 AM

General Comment  - We finished up 7 in beans and 2 in corn.  Here is the feature I want you to see as you prepare for this week.  This map is virtually the same from this coming Friday through a week from this Wednesday which is June 22nd.  Map for Wednesday June 22nd.

We have one or two days where the market may see enough moisture to allow for some selling to keep the market bulls at a distance but I doubt it.  The weather features are growing too strong in the direction of a major blocking high starting to eat at corn yields and as I have been saying for MONTHS...demand is too strong for there to be a below trend line yield.  Also remember, the government the past three years has increased the trend line angle which makes it even easier for yields to come under expectations.  I'm not ready to say we are going to $4.00 corn, don't be silly; but again our point is that this is not the time to be selling.  The risk is to the seller here not the buyer.

I am buying July 210 calls from the get go this morning.  Yes, July which expires Friday the 25th of this month or a week from Friday.  They are cheap and about the same as buying futures with a small amount of time value.  If the market moves higher we will exercise them and roll to December. 

Sunday Evening June 12th - 8:00 PM

General Comment  - As I write this, the soybeans are up 12 cents and corn is up 3 cents.  That may or may not hold the rest of the night.  Read on....

Just as we reported last night, the system went where we said it would go but it didn't drop that much rain.  There is a front which will now slip down and through the corn belt but there remains a big question as to the amount of rain that will come with it.  Once this front is through, the forecasts all dry up and we can see some real heat start to build in with a major blocking high pressure ridge.  If it doesn't rain BIG over the next 36 hours, this market will move higher and some traders already believe that is what is going to happen and thus why the market is up right now.  Will it hold?  Time will tell and to be honest I can see it either way, but for now, there is not as much moisture as we expected so the markets start he night session higher. 

As I said last Friday, Monday is a buying opportunity.  Once this rain threat is gone, there is nothing here to knock the market back down until the weather patter changes and that could happen in about two to three weeks.  Then again, it may not!!!

Saturday Evening June 11th - 7:00 PM

General Comment  - OK...The American model has FINALLY changed and shows the rainfall just where the other 5 have said it would be some 48 hours ago.  Another example of just how bad this model can be.  The only question now is how much rainfall will these areas get.  Some areas will get 3 inches but this thing is moving fast and it may not bring as much of a wide soaking as it appeared yesterday.  We'll update this site again tomorrow night around 9 PM and by then we should have a handle on it.

Friday Afternoon June 10th - 1:30 PM

General Comment  - PLACE YOUR BETS EVERYONE....

That is how it felt today as we entered the close.  Let me show you what I'm talking about rather than just discussing it.  I know some of you guys have slower internet connections but this is worth the wait.  While you load the graphics get a cup of coffee or something but look at what is happening. 

Here is the 11AM track of the tropical storm Arlene using the American model.  Click Here

So now you see where the American model has it going.  Now lets look at a recent model's rainfall expectation.  I don't have the tract just the forecasted amount of rainfall.  Click Here 

All other major models agree with the Navy Model.

Now the question is, what did the trade today know and when did they know it.  If you look at the last few minutes of trade, we broke into new lows in corn and soybeans indicating the smart money waited until the last minute to push the market lower based, not on the consensus forecasts of TV weather men, but professional weather forecasters who have access to all the models.  We finished against the lows and are setup for a hard break on Monday IF we get the rain as expected.

So what do we do??  We buy it Monday morning!!! 

I went home short after selling the higher open today knowing what the major models were saying.  Monday, no matter what, it will be a buying opportunity.  If it doesn't rain, we'll buy it higher than where we closed today.  If it does rain, we'll buy it lower.  Longer term, a 2 to 3 inch rain will not "make" this crop and the longer term forecasts are dry making this a buying opportunity.  Remember, the only thing giving them rain is a tropical system in the Middle of June...the longer term weather patterns are hot and dry and we have to go with that until it breaks.  This one system is just an aberration not the current pattern.

HEDGERS - The risk is not to the down side.  With the current basis levels, loan is actually higher in some places.  What is the good in selling at these levels???

Natural Gas - Here is the break we said would happen and I don't think its over.  This one is too pumped up with speculators and should have a nice correction over the next few weeks. 

Rice - The market sold off early and then had the regular buying near the close.  While a bounce is still possible, the trend remains down and $7.00 is still our target for July.  Once we get into harvest here in Texas, if futures are this high, we'll do the "WMP - Futures shuffle" and lock in some nice premiums.  Here's hoping futures are still here when we get there. 

Thursday Night June 9th - 9:00 PM

General Comment  - Markets started higher tonight but have backed off and are unchanged in corn and up about 4 in Soybeans.  Here is the story.  The American weather model is the only model saying that the rainfall from the tropical depression will miss the central and eastern corn belt.  The other 5 say that up to 2 inches will fall over a wide area of the corn belt including the driest areas.  I'll go with the other 5 and trade for a break early next week..  On top of that, look at the 6 to 10 day weather forecast.  We are starting to see the merger of the eastern and southern highs which could bring abut some major heat in the Mid-west late next week.  That is bullish. 

Bottom line...Sunday night we could have a real problem if the rain comes into the Mid-west.  Then, we could sell off only to turn and rally if we start to see the heat establish itself for an extended period of time.  I mean 2 inches is great but it won't make the crop.  Be in a position to buy a break early next week.

Oh yes, there is a Supply and Demand report tomorrow morning but it will have little impact as its one of those reports that is mathematically calculated and doesn't come from any surveys so production number won't change.  Exports are the only thing and there will be some minor changes there.  All in all, the report will be boring. 

Thursday Afternoon June 9th - 2:00 PM

General Comment  - Please read our comments from this morning as we talked about the IF the market got up on the day and sure enough.  We bought the beans as they got into plus territory but the corn, while trading up for just a few minutes, couldn't really give us a buy signal.  It is obvious that the big mover to the upside will be the soybeans and not the corn.  It will take new highs in the beans for corn to go anywhere and I think it will take damage to do anything.  Weather the next 24 hours will be critical.  Not the actual weather but the weather forecasts for this tropical depression and where its going.  Our next update will be tonight around 9:30 PM so check back then.

Rice - This market shot higher in the last 15 minutes as we may have run some stops but it really doesn't look like that it was very many.  The strong close is suspect and we may see some additional selling in the morning if nothing shows up on the news wires to support the move today.