Friday May 28th -

Soybeans - After yesterday's limit down move, beans tried to rally and put in a reversal but that finally failed late in the day and the market pushed on down toward our $8.10 target in the July.  We got early buy signals on a day trade but they failed late in the day and we broke even after having a 12 cent profit.  There appears to be no on interested in buying positions at this level so the follow through to the downside sets up our target; however, the market could turn this weekend on a number of issues and we will have met our objective close enough.

Corn - Too wet and less acres are the theme here. We have been bullish a long time but my concern is the rally on WET weather.  My experience says this will not hold and we will start to hear of perfect crop conditions in the next few weeks.  Right now I wouldn't buck the trend and for our local corn guys, who have roasting ears now, get ready to get to 50% sold.

Rice - Still no reason to own it.

Thursday May 27th -

General Comment - You got to hate the way beans traded today.  Another trend day down with the market settling like a feather to the ground.  All of the soybean number this morning were bearish and as we have been saying, the funds can sell this one short as well and it looks like they are doing that very thing.  Another look at how to get out of limit moves.

Soybeans - Limit down today but synthetics show the market only 3 to 4 lower then the 50 cent limit.  The question here is WHEN??  When does the market get to value and then what?  I don't have the answer or I would be in Florida, day trading from my computer by the pool...OH!  I forgot, that is what I'm doing!!  Anyway, look back at our comments from recent days and you will see we talked about an objective of $8.10 in July.  We are now just 12 cents from that level.  This is our minimum objective and the market may go lower than that; however, tomorrow, we will be looking for a reason to own beans short term if we hit the $8.07 to $8.14 level.  Now I said Looking not buying!!! 

Corn - A reluctant follower.  I like corn long term but the near term fundamentals may start turning toward bumper crop. 

Rice - Dead market.  We are out waiting for the last gasp bull move which may come from a price level a lot lower than where we are. 

Tuesday May 25th -

General Comment - Another big day up in corn but the beans didn't hold.  As I write this the markets are just a bit lower.  Interestingly, open interest was up in corn after today's trade but soybean's open interest was lower indicating short covering.  Also, rough rice's open interest was lower as well indicating short covering.  All in all, not a stellar performance in the "who's buying" category.  Near term, the market will allow for a too wet premium but "rain makes grain" and in 30 years of trading I have only seen one year where too much rain ended up hurting the crop this early in the season.  I look for the market to give up some of these gains in the next several trading days.

Monday May 24th -

General Comment - Too wet!!  I doubt it; however, the weather pattern is wet for the next 10 days and that could keep support under the corn.  It will go from too wet to too dry at some point.

Corn - Nice rally today as the market consolidates from the recent highs but again the volume was light.  That indicates unwilling sellers not aggressive buyers.  Big difference. I would give the market a 50-50 chance of trading to $2.85 and a 40% chance of touching $2.80 before we get through the "too wet" part of this weather cycle.

Soybeans - $8.10 remains the objective.  Even with new crop up on wet weather, the old crop is not in a position to rally based on fundamentals. 

Rice - Extremely light volume today.  I wish I had a better target but the market is setup to work toward $10.20 and if that gives way, a move to $9.60 is likely. 

Friday May 21st -

General Comment - I've been out of the office the last two days and will be out most of next week.  The action today is non-directive in any of the markets.  I still have solid objectives for lower prices in the beans which will drag down corn.  When the weather changes, about mid-June, we will be headed higher across the board.  Rice is in no-mans land and volume is low.  Sales numbers on Thursday were much larger than I expected but the market ended lower indicating that exporters do no need coverage from the board.  I think this market has one more final push in it but it will come late in the game where very few can play or will even want to.

Wednesday May 19th -

General Comment - Don't have much time for an update tonight but here is a short comment.  The action in Rice today was terrible and in the corn and beans, great except....all we did in the beans is rally into the gap and then close back below it.  This is not bullish.  We may try to run up there one more time but as I write this, beans are down 11 in overnight trade.  If they move back under $8.90 we may quickly head for out target which is now at $8.10 in the July.  This will pull corn down with it.  Long term I want to own corn but not right now.  Volatility is going to be high the next few weeks.  In rice I'm out and glad I am based on the close tonight.  It's not good to say the following when you are considered an analyst but....I really don't have a clue on the rice so when in doubt...be out!!!  Sales in the morning may give some direction.

Tuesday May 18th -

General Comment - I always tell my self, "if the market doesn't do what it should, get the heck out."  I took my advise today.  The market should not have traded the way it did if it is going higher.  All the grains and rice showed good strength yesterday but fell apart today with no follow through.  The selling in the grains and rice indicate to me we have not cut off the selling at these price levels.

Corn - The key reversal up in corn yesterday had no follow through today.  This sets up another test of $2.88.  Corn very seldom makes a double bottom so odds now favor new lows.  I think July corn at $2.80 is too cheap but this market may get way too cheap before this break is over.  If bean hit there target, there is no way for corn to stay over $2.90.

Soybeans - Last night we ended the general comments by saying, "Look for a higher day tomorrow at the start as beans will challenge the gap they made today.  As I write this, overnight trade is up 8 cents in the beans and corn is up 2 cents."   It was a pretty pathetic challenge of the gap.  We were up 3 cents and within 1 1/2 cents of the gap early and then the market collapsed and finished down 31 cents.   We got sell signals at $8.89 and out we came with a loss for our overnight trading effort.  I should have taken my own advise to day trade only.  What really hurts is I sold to get out and didn't take the short day trade missing out on a 15 cent winner. Oh well,  I have learned my lesson... at least for now!!  We have a new target of $8.06 in the July.  Yep that is right...$8.06.  That is if the gap from Monday becomes a measuring gap.

Rice - I'm out for now!!  I think the chances of buying this back lower is much greater with the down move in the other grains.  I look for the market to test the $10.20 level and if that level is taken out, it could get real ugly.  $9.60 is a long term possibility but I don't see the fundamentals that would support another $1.00 down.  This Thursday's export sales is going to be interesting.  Small specs should take a break from this one for a while.

Monday May 17th -

General Comment - What did we say on Friday's update...   "it is very likely the funds will continue to sell and could end up fairly short and soon; however, for what it's worth, and it usually is worth a lot, the technicals are set up for a bounce from early lows on Monday.  It's not over until the FAT soybean lady sings!!!  That is exactly what happened today as the lows were made about 25 minutes into the day's trading session and rallied back toward the daily highs in beans while the corn made a reversal higher.  Look for a higher day tomorrow at the start as beans will challenge the gap they made today.  As I write this, overnight trade is up 8 cents in the beans and corn is up 2 cents.

Corn - Today's low was $2.88.  If you read our comments here the last few days you will see our objective has been $2.89.  Today's key reversal up off of this level will need follow through to the upside indicating the market may be turning.  The fundamentals are still bullish.  We need a weather scare to really pop this market higher.  I'm not sure we are ready for a sustained rally here but I hope I'm wrong.

Soybeans - Funds may have sold more today and may in fact be a little short but the buying at the lows early sets us up for a least a test of the top of the gap at $9.32 1/2 in July.  We day traded from the long side today and for the first time in weeks, actually stayed long through the close as the market showed good buying right into the close.  With the over night up 8 right now it looks like a good trade as my rational is based on a market not wanting to gap just yet.  Time will tell but I'll bet you one thing, I won't be in this trade tomorrow night unless beans close limit up or very close to it.  The volatility in this one is going to be something to watch and ...day trade!! 

Rice - Looks like the rice market of old as it rallied to highs mid-day only to back off, sit for awhile and then rally again on the close.  This market is a tough one and for you in July options, it could be a long trade as well.  A close over $11.00 would be very important.  I think it still could move over $12.00 but I think very few traders will get the ride and for those who do, it won't have been a fun ride.

Friday May 14th -

General Comment - According to floor sources, today's action probably finished the funds being long in Soybeans or at least go them very close to being slick.  The first thought is that this is the end of the selling but you should remember that not all funds have the same positions.  When we say the funds are slick it means they have a NET position that is balanced.  One fund may be 10,000 contracts long and another fund maybe 10,000 contracts short and we will say the funds have no positions or they are slick.  Because of this, it is very likely the funds will continue to sell and could end up fairly short and soon; however, for what it's worth, and it usually is worth a lot, the technicals are set up for a bounce from early lows on Monday.  It's not over until the FAT soybean lady sings!!! 

Corn - For the last several days if not weeks, we have pointed out the possibility for corn to head to the $2.89 level in July.  Today's low was close enough at $2.90.  I'm not saying we are going higher from here or that we won't trade back to $2.89 or lower, I'm just pointing out that technical analysis is a valid form of looking at the market and getting an idea of where it might be headed.  Early next week, the market will respond to new weather forecasts and if there is a surprise, it will be a bullish one.

Soybeans - The funds are back to neutral but as stated above that doesn't mean some funds are not still long and wanting out while some funds have already gone short.  Even so, the big position is gone and the market can get back to fundamentals very soon.  The quick start to the crop for this year will increase the likely hood of a bigger crop but it's a long way to the finish line and there will be a shift in weather.  There always is.  By the way, it was another big day for day traders today. 

Rice - We held like a rock just above major support.  I'm not that bullish here because I think the market may be able to coax out a big nothing over the next few weeks.  Demand this time of year normally drops and with May now history, July will be hard to trade especially if you are in options.  My guess is that options traders in July will NOT be able to take part in the last gasp of this long term bull market, assuming there is a last gasp.  Next week, we should settle down a bit.  As we have said, "it is hard to trade and tough to hang on to."

Thursday May 13th -

Corn - Perfect weather will be the theme near term so there is no reason to own corn right now.  We will go from too wet to too dry in a week or two and then comes the dry forecasts which will start the market back up to put some weather premium in the market.  I still have a down side target of $2.89 and odds favor it being hit.  It could go even lower if the fundamentals stay as they are through May.

Soybeans - There were no major deliveries as expected, or should I say feared, in the delivery report this morning.  May shot right back up 21 1/2 cents today.  Near term, I'm staying the course and day trading this one.  Weather will be more the key very soon.

Rice - Rice collapsed today on long liquidation but the market fell to the break out point of $10.50 and then held there the rest of the day.  The market has broken $1.00 in four days so a bounce is likely.  The export sales number today was not more than 51 so I will hold back my wrath until next week.  WHEN WE WILL BREAK THE USDA NUMBER THEY PUT OUT 8 DAYS EARLIER...GEE WHIZ....

The USDA may be playing the game of "We can't be under but we can be over the final carryover number" game!!  It's like they are going to move the export number back but only after it has been surpassed by total sales.  So they added 51,000 MT to exports in the May S&D report and then one day later we ate up 29,000 of that number.   It is apparently OK since in June they can change the numbers again.  As long as they don't put out an estimate on exports that is too high.  I wonder why???

Wednesday May 12th -

BTW...Before I get into today's markets, our independent weather forecaster has just come out with a  notice of change for weather patterns in the current models which point to a major shift from too wet to too dry starting in June!!  He has been very good but will tell you that one reported change is not enough, we need several confirmation runs before he'll pull the trigger on major drought concerns.  It's hard to talk about drought with the rain we have had but let me state for the record.  YOU DON'T MAKE A CROP IN MAY.  NEVER HAVE, NEVER WILL!!!  There is a lot of time left for things to turn ugly here and if they do...I'm not going to think about it right now!! 

Corn - Well, how interesting!!!  Today's S&D report is bullish but the market sank almost 11 cents off of the early high after soybeans plunged under heavy liquidation selling by the funds.  Corn came back though in the last 30 minutes and almost got up on the day only to settle back under local profit taking.  What does it mean???  Absolutely nothing!!!  Our objective for this break is $2.89 and today's low at $2.92 1/2 may be as close as we get to it.  Tomorrow will be interesting as the market filters through the bean mess (see below) and export sales numbers in the morning.  For me, long term I want to own this so buying a break like this isn't a bad thing to do.  If we test today's low anytime  soon I'll be buying options for the long haul.  Specifically, September calls.

Soybeans - OH MY GOSH!!!  47 cents on a short day trade today.  This is why we have been saying, day trade it, do not get married to a position. 

An 80 cent range is not normal in beans and when it happens, something big is out there.  The something big today was rumors of Chinese crushing plants going bankrupt and large deliveries by Cargill in the May contract tomorrow.  These two things could be linked together and it all made sense except for one thing.  Cargill is in the business to make money and the basis levels are so strong in New Orleans, why would they deliver when it costs them 20 cents to do it.  I'm not going into the long story here, but if Cargill delivers, and we should know later tonight, there is something really wrong in the market place.  So if the rumors are true, we just got a lot more beans to sell than we thought.  We will need to look at deliveries tonight and sales information, specifically cancellations, tomorrow morning.  Then we can address the rumors.  If they are not true, we might see another 47 cent day trade in the other direction!!!  If the break holds, I want to own it for the longer term using August call options. 

Rice - What did we say last night, "If the number is over 11 million cwt., they will have some explaining to do."    OK...START EXPLAINING!!! 

The USDA dropped domestic consumption very close to our number at 79.8.  They raised exports to only 82 which actually increased long grain carryover by 1 million cwts to 12.2 million cwt. compared to our guess of 10.3.  Let's look at this now.  Our new Rice exports chart now shows we need to average 10.2 thousand metric tons per week to hit this new target.  To put that in perspective, if we have one week's sale of 51 thousand metric tons, (last week's number was 45), we will have already hit the USDA number, that they PUT OUT THIS MORNING!!!!  HELLO!!!!  IS THERE ANYONE UP THERE IN WASHINGTON D.C. THAT LOOKS AT NUMBERS AND NOT JUST CRANKS THEM OUT!!!

If tomorrow we have a large sale in long grain, and I'm not saying we will, this will prove that the USDA didn't do their homework AT ALL!!!.  If on the other hand, we have cancellations, which is possible, I'll back down, but as of this writing, I have my doubts.  I will say this.  If we surpass the sales number tomorrow that they put out today...I AM GOING TO HAVE A FEW WORDS IN THIS SPACE TOMORROW NIGHT!!!  Can they possibly look that bad???

Tuesday May 11th -

Corn - This market is consolidating the loses of the past few days.  We still have a target of $2.89 on the downside and expect the market to head toward that level.  Tomorrow S&D report will be huge in the face of perfect growing conditions right now.

Soybeans - Nothing new here.  Planting is going well and the crop is off to a good start.  The report tomorrow morning will be our next big key as to futures directions.

Rice - WMP was down 6 cents and the futures off 8 cents in front of tomorrows S&D report.  I expect the numbers to change but the question is the carryover.  I look for the USDA to cut domestic usage by 4 million cwt., raise exports by 5.5 million cwt and then cut carry over to 10.3; however, they may not cut the carryover that much since they don't want to do it too soon.  If the number is over 11 million cwt., they will have some explaining to do.

Monday May 10th -

Corn - Perfect rain sent corn reeling under fund liquidation.  The break through $3.30 sets up a test of $2.89.  Talk of 81.5 million acres of corn and an update of China's inventory that should be higher than the last USDA report has the buyers on hold.  I want to own it but not right now.  I'll wait to see how it trades down to the $2.89 level.

Soybeans - The market broke big today but didn't hold the losses.  If corn acres are up, beans acres are down and demand should stay strong.  The dollar going up in value will not help us much here.  I want o own beans but not yet.  Day trading is still the way to go. 

Rice - The market was down 10 cents today but that was after it was up 38 last Friday.  We also closed on the highs.  I still think we are headed toward $12.00 but this one is tough.  I'm trading it but on much smaller volumes.  Another 20 receipts were cancelled today so now we are down to 785.  This means more rice is being taken off of the board and the signs of tight supplies continue.

Friday May 7th -

Corn - The market is against major support and could be building a bullish triangle or pennant.  Today's low now becomes major support. A close under this level could set up a test of $2.90.  I bought the break today.  The selling has been fund money related not S&D fundamentals.  A close back over $3.22 is now needed to turn the market higher. 

Soybeans - The market exploded on rumors the USDA was going to put more restrictions on bone meal feed to cattle.  The sharp move up turned in a key reversal higher.  This need follow through next week or we could sell right back off in front of Wednesday's S&D report.  I'm still day trading but was not in the office today to do it.  That cost me big as it was a 25 cent day on the system. 

Rice - Commercial buying took rice into new highs.  The highest level since 1996.  We are now seeing receipts cancelled as well and as we pointed out in the special rice comments a couple of weeks back, this may be the ingredient that signals the final push higher.  The current number is now at 805 which means 95 have now been cancelled from just two weeks ago. 

This move could be quick and volatile and I would not trade it with a full position as I have mentioned the last few nights.  I bought the market yesterday and added today but I'm about where I want to be given the possibilities near term.  By the way, now I know they are reading this in Chicago so, I just want to say hi to my friends in the rice pit.  I'm coming to see you pretty soon.

Thursday May 6th -

Corn - As we said yesterday, patience.  Long liquidation continues as we are now set up to test recent lows.  If they hold, all is well, if not, a test of $2.90 is possible.  We want to own it but it must turn higher before we will.

Soybeans - Even down 19 1/2, the beans never gave a good sell signal on the day trade system today.  Look for more liquidation.  Long term, I expect a good weather scare but it may come after the fourth.  Right now, conditions are perfect.

Rice - "A close over $11.12 would indicate that this break has been nothing but a test of the flag breakout at $10.50."  We closed at $11.11.  I wonder if those guys in Chicago are reading my site.  Tomorrow will be an interesting day.  I like the rice as I have said and will buy it if we can muster a higher close.  I think the USDA report next week will be bullish.  Also, the traders who are stopping the rice deliveries, are not putting them back out.  This could indicate some cancellations are ahead.  This is going to be interesting. 

Wednesday May 5th -

Corn - Down 4 today under a stead flow of small selling.  In other words, a boring day.  There are dry areas in the west that are now forecast to get some rain later this week.  That helped push the funds into the sell side of the market.  Long-term, I want to own it but for now...patience.

Soybeans - Another nothing day in beans as once again all day trading signals were reversed.  You would have made money by selling the buy signal this morning and made even more by buying the sell signal which occurred when we made new lows on the day after 10:30.  This is the markings of a sideways market.  Things could change and soon but the weather needs to become a major factor first.

Rice - A close over $11.12 would indicate that this break has been nothing but a test of the flag breakout at $10.50.  If we can muster that kind of a rally, I want to be on the long side but in smaller positions than before.

Tuesday May 4th -

Corn - Market still holding its sideways pattern.  I can see it either way but favor (and am hoping for) a break near-term.  I'll buy it at $3.28 and sell it at $3.18 (but not for long).

Soybeans - Nothing new here either.  Maybe we are going to slow down a lot near term.  There was one day-trade today and it didn't work.  It was a small loser which may indicate we are going to slow down a bit.  One day doesn't mean much but when a market is range bound, the normal day-trade indicators reverse and you should buy a sell signal and sell a buy signal.  We will see if that develops the next few days. 

Rice - We wrote last night that we had exited the market and were expecting a test of the break out.  It wasn't a real stretch last night to see that we had gotten way ahead of the major buying power in rice.  This break has done what was needed for the technical picture to setup for the final push toward $12.00; HOWEVER, the market needs to consolidate here and hold the $10.50 level in July on a close basis.  A close over $11.12 should move us back on track for a push into new highs.  As I have said until I sound like a stuck record, this last push will be hard to trade so don't be greedy.  Give it room and don't marry a position. 

Let's talk...One thing I like to do is try to realistically determine the upside potential of a market.  As you who read this column know, I have been bullish for months.  I have had large positions in rice and have reaped the reward.  The potential for rice to go to $12.00 was there when the market was at $8.00 and we said so.  The potential is still there.  The difference is the current price is now $11.00.  With this said, it makes sense to play but not at the same scale as when we were at $8.00.  It is time to downsize positions NOT super size them.  This has been a great move, an incredible market, and a lot of fun, but.... it is just about over and it's getting time to move on.  By the way, corn at $3.00 is the same as rice at $8.00.  Bottom-line:  Do not be setting here with big positions.  The risk is growing and this is becoming a game for the big boys so be careful and start looking at other opportunities. 

Monday May 3rd -

Corn - Not much to talk about here as the market was higher into tonight's planting progress report which showed the crop at 63% planted verses a 40% average over the last 14 years.  We never got outside of Friday's range so there is not a real conclusion to draw from the action.  A move out of Friday's range would be a great clue as to the direction the market wants to go. 

Soybeans - The market has rallied to resistance and needs to prove itself near-term.  Day trading is still the way to go if you have a good system to use.

Rice - Deliveries were small this morning at 36 but the market found willing sellers at Friday's levels.  It is interesting to note that the major stoppers last Friday, did not re-deliver today.  This could be a bullish factor down the road and is worth watching.

Today, we opened sharply lower and touched limit down only to rally and go up on the day, but then came more selling which for me says we have hit a major resistance level for a while.  I dumped futures today when the rally stalled and started to fail.  The buyers were not there in any volume so I got out right about the closing level.  This tells me the real buying power is at lower levels.  I look for the market to go find the buying level, which could be 40 to 60 cents lower than today's close.  On the other side, we still must consider how hard it will be for the market to break substantially given the USDA May S&D report  is next Wednesday.  My guess is we start lower tomorrow and test today's low.  If we see substantial long liquidation, we could break hard and test the break out of the flag on the chart which could take us down to $10.60.  Even so, I doubt it will go to that level before the May report.  Like I said, this one is going to be hard to catch and tough to hang on.  I decided to let go today but probably not for long.  Those of you long calls or call spreads, hang in there.  Even on a big break, we may be able to do some rolling of short calls that makes sense.