Tuesday May 31st - 

General Comment  - Corn flirted with a key reversal down today while beans held their ground.  Once again, we have two sided forecasts with one model saying hot and dry after this weekend and the other saying a return to normal weather patters late next week and into the middle of June.  Who's right?  Don't know but we have to place our bets with the model that has done the best job and that is the one saying hot and dry.  Technically, you have to like the soybeans.  If you read our weather market link you'll see we talked about a day like today where the market started higher, sold off, and then came back near the close to finish strong.  Almost like a backwards check mark.  That can be a continuation day and it looks like that is what we had today.  The corn however, gives us another signal today with a spike and sell off with almost a key reversal down.  Once again, soybeans have the better fundamentals so they are going to hold better.  In corn, there is such a fear of a bumper harvest and huge carry-over numbers, sellers are quicker on the trigger.  In any event, corn is pointing lower technically and beans higher using today's action alone.  I guess that means nothing will happen tomorrow???  Don't count on it!!! 

Rice - Nice break today may have put the final touches on the current break.  World prices may be heading lower based on over seas action but this has been expected for several weeks.  We are out and that's our recommendation.

Natural Gas -  We could have more of a bounce here if the weather is getting ready to turn off hot.  The next few days may see more strength which puts us back in buy the break mode. 

Tuesday Morning May 31st -  8:15 AM

Morning Comment  - Given the lack of rainfall in the near term forecasts and hotter weather right around the corner, the markets should be higher today and maybe sharply higher.  Damage to the crop has not occurred but it could be dead ahead especially if we stay dry for another two weeks and the heat starts to build.  If the weather forecasts change to more rain, we will break hard.  I look for volatile two sided trade until we get a better idea on any damage to the crop.  If we gap higher today and hold it, we may get some good targets for the technical traders to look for.

Friday Morning May 27th -  6:40 AM

Morning Comment  - Last night's action is bearish for today.  We started higher and as the night wore on, selling came into the night trade with beans down 10 cents from their overnight high and down 4 cents from yesterday's close.  Corn also reversed overnight which probably means the early morning weather forecast run has a change in rain coverage for next week.  This is exactly what we wrote about last night calling for a near term break.  Our weather guy has been telling us the last two days that the solution to the current movement on the weather maps would bring more rain into the Mid-west and that the forecasters, who use the American model, would change their forecast. 

You see, right now, it is more about the forecasts then about the weather.  Even if it is raining next  Wednesday all across the entire corn belt, if the extended forecasts that day are HOT and DRY, the market will be headed higher because we are trading next weeks weather right now and will be for the next 6 weeks.  That is why we like our weather service so much.  Our guy is forecasting what the weathermen are going to say more then what the weather is going to do. 

Things could get tough today for the bulls but remember, the forecasts have been for below normal rainfall and now they are shifting to more normal NOT above normal moisture.  Normal rainfall will help the crop but won't move it into the category of above trend line yields for this year.  In other words, we are still susceptible to any weather problems affecting the crop as there is no reserve in the crops condition to buffer even a minor weather scare.  All of that to say, we may break but it could be a buying opportunity and that is how we will approach it near term.  Corn could break 10 cents from here easily and beans 20 to 30 cents.  If they don't and we turn from here and make new highs, the market is telling us things are worse with this crop than we thought.

Thursday 26th - 

General Comment  - Still a weather market and it is still just a weather scare.  Our weather guy is very good and he says the forecasts may shift to more rain in the next 24 hours.  That would be for the central portion of the Mid-west.  He also points out the rainfall is more towards normal then a good soaking rain.  If he's right, we could expect a break in the next few trading sessions and will consider using that to be a buyer in the corn and beans.   Here is a quick read on a weather market.

Corn - Read last night's comments.  Nothing really has changed as the market has done quit a bit already to put some weather premium on the books.  If things start to change, this one could sell off and that is when we want to start thinking of buying longer term drought protection because the crop is not off to that good of start.  Specifically, I am looking for a break, then a rally and then...well, who knows.  It will depend on the weather forecasts at that time but we do have conditions setup for a good run into Mid-June with the current long-term forecasts that we have. 

The current price is still too close to loan for me to start selling a bunch new crop.  I'm willing to sell a little here but I still think there is a chance of more weather problems ahead and a good chance to price in higher than we are right now even though I expect a break here near term.  Remember, I'm talking to the guys in South Texas.

Soybeans - Still going.  The darling of the fund traders popped today with dry forecasts. Just remember, odds favor this changing in the next few days and what has gone up, will go down.  Expect a volatile ride near term in the beans.

Rice - Boring!! 

Natural Gas - I think the small spec came to the mountain today and dumped a huge portion of their position.  Commercials backed up and priced in the selling as we broke over 20 cents at one time.  Since we are needing to buy in some gas, we took the selling as a good time to lock in some more gas purchases.  I never like picking a bottom but that is not our objective.  We want to get gas locked in at a price we can live with because the whole summer will not be at 60 degrees for a high across most of the country.  Is this the low???   Don't know but I have some indicators telling me, in fact they are screaming, get some coverage here and that is what we are doing.  I strongly recommend gas buyers get some coverage here and I would suggest a nice hunk of it.  50% should be a minimum level right now.  The close was also supportive as it looks like traders held the market down hoping for some Market on Close selling, but it never showed itself and we bounced  bit in the last minute.  Tomorrow will be interesting.  If we take out today's high tomorrow or Monday, we will have a short term bottom form here in July Natural Gas.

Wednesday 25th - 

General Comment  - WOW!!  Lets see, corn breaks 8 cents off its high then comes back up to close higher and avoid a key reversal down.  Soybeans ignore the sell off in corn and shoots higher big time in a strong move as if its so cold,  it may actually snow on July 4th across the whole Mid-west.  Again I say...WOW!!!  Typical weather scare to say the least.  Here is a quick read on a weather market.

Corn - There is not a lot to add to what we have already said.  The market is still trying to go higher but it is following every weather forecast that comes out now looking for a change in the current directions.  Our longer term forecasts which we follow, are not that bullish indicating that there will be some spurts of hot and dry weather but maybe not enough to knock the yields much off of trend line projections.  If that is true, we want to sell this rally as this scare will end and a nice break should follow.  For now, lets hope it comes from about 20 cents higher than current levels. 

Soybeans - We were able to get through the reaction high back on March 31st and that ran some stops. Now can we follow through tomorrow?  Again, look for weather forecasts to be the turning factor near term.  I see them changing to warmer and wetter in the next few days because after all, its a weather market and weather will flip back and forth; however, I'm not picking a top and I'll continue to day trade here.  Sure has worked so far. 

Rice - Since there is nothing to say here, do I have to write anything for this one?  Oh great...thank you!!!

Natural Gas - Let's see, Crude up $1.23 and natural gas...DOWN 1.6 cents.  Makes perfect sense to me.  The market hasn't got a clue!!!  Actually, it does make perfect sense.  Natural gas has too much inventory and there is little sign of heat out there; however, we may see a change in the forecasts over the next few days which will warm things up.  Even so, I'm not sure it can warm up this market very much.  I still like buying dips here for hedgers but am thinking we are running out of time on this current down ward spiral.

Tuesday May 24th - 

General Comment  - There has been little change in weather forecasts as the two major models still don't agree on what is coming next week to the western corn belt.  What both do agree is that there is no rain in the next few days and that has traders treading water.  The American model could shift back as it has a tendency to flip-flop a little more than the European model but one thing is for sure, one is going to be wrong.  Usually, the first weather scare doesn't turn into problems.  Its the second or third one that will get a firm grip and hold on.  That assumes we have a second or third weather scare. 

The bottom line for me remains the question, where is the risk?    It certainly is not down with the loan sitting just below the current price level, at least in South Texas.  The risk is solidly to the upside and it is still not even June.  So I ask, why in the heck should farmers sell this close to the loan level for new crop.  I can't recommend it; however, there is coming a time I will be and it may not be that far away. 

Rice - Still no bounce here.  The trend is broken but the market is not in a free fall.  Certainly the other grains will have some impact here is they can hold a rally together??  Well, if that is the only thing holding up the rice, its not much.  I want to sell a rally here if there is one to have.

Natural Gas - No follow through to the upside on the Key Reversal from yesterday.  The market is still fixed on the sell side with no signs of any problems to spur buying in the futures.  A move over Yesterday's high will signal a charge for the $6.70 level in the July; however, we may make new lows for this move first.

Monday May 23rd - 

General Comment  - Last Thursday was a big buy signal and we almost missed it.  After rainfall developed in areas where it wasn't expected, the market couldn't sell off.  Friday we moved higher and today we moved sharply higher in corn and marginally higher in beans.  In fact, we closed right on the lows in beans while on the highs in corn.  What does it mean?  Today's action was more than likely a major short covering rally in corn which is funds covering their butt just before the end of the month.  Once they are cleaned out, this little rally will stall unless it really starts to heat up in the Midwest.   The soybean trade today tells us the market is going to need more bullish news to really forge ahead and we'll see if the crop reports and weather forecasts tonight give them what they need to move higher.  We want to buy breaks and hold current long call options.  If you are in July, we want to roll them to September ASAP.  If you want to take a shot at selling, we'd use September put options even if you are in Wisconsin.  Today's 6-10 day forecast should help the bulls as it has come out cool and dry. 

Rice - With the grains in rally mode, rice held its ground but that's about it.  To say the least it wasn't very impressive.  We still want to sell rallies in this one.

Natural Gas - A massive Key Reversal Up today.  Now is there any follow through to the upside?  With no weather concern on the horizon, it appears this is just a corrective bounce.  $6.68 is resistance in the July and where we look to cover shorts right now if we move about that level.  Fundamentally, I can still see $6.20 to $6.25 in the July before this trend ends but a heat wave or Hurricane can change things really fast.

Thursday May 19th - Quick one tonight

General Comment  - The market is having a hard time breaking much even with rainfall across parts of the Corn Belt.  The next rainfall amount is not until late next week which could keep things firm but if heat starts to build anywhere in the corn belt, things are going to get hot and heavy fast. We want to buy a break.  It will be interesting if we can get a sell off tomorrow with a two day weekend ahead.

Rice - We got the bounce we talked about last night but it didn't hold.  Again, we'll turn sellers over $7.60 and hope we can get there near term.  

Natural Gas - Another lower day with the gas report on the numbers.  The trend remains lower but I can see a bounce here near term.

Wednesday May 18th - 

General Comment  - Lower rainfall is expected by some forecasters over the next 36 hours and that gave support to the grains today.  If we miss those rains, things are turning dryer than any of the forecasters out there are expecting.  Our guy is on the other side and thinks there will be more rain then is being talked about and if he is right, we should break in the next two days.  I want to own calls NOW ON ANY BREAK!!!

Rice - There was another attempt to bring out the big longs today as the market broke yesterday's lows and ran some stops but I didn't see any major selling and the current sellers who our pressing the market, may have pressed themselves into a hole.  The selling dried up today which tells me to expect a rally near term.  For me, that will be a selling opportunity as the chart is looking too negative to be long in here.  We will sell a rally over $7.60 in the July.

Natural Gas - Lowest close for the move today and a gas report tomorrow.  I look for new lows again but must warn you that we are pressing on into oversold conditions and a consolidation period is possible in the near future.  That could last several days to two weeks.  A big break in the crude sets it up for a test of $46.00 but at that level, we would want to buy in hedges for any needs the first half of June in the form of Fuel oils. 

Tuesday May 17th - 

General Comment  - The market continues to digest crop reports and rain forecasts.  Some reports indicate rainfall may not be as high as earlier thought in this weekend rains but then again some forecasts continue to show good rain for the driest areas.  We will continue to think a weather scare is still down the road a bit but some weather premium in the market is called for right now and that will be what happens near term.

Rice - WMP Unchanged- Today's action may indicate world market prices are about to fall.  Thailand futures were lower but volume was very small.  Even so, we know they have government stocks that they may sell and soon.  Now who is it that says Thailand doesn't have a subsidy program for their rice farmers?   The trend line was broken today but not decisively.  If we get follow through selling tomorrow, we have turned the chart down or at best sideways and if that is the case, we want no positions in futures right now.  The better play is in the grain markets near term using options.

Natural Gas - We continue to trade along support lines.  Crude and Natural Gas reports tomorrow and Thursday could give us some near term directional steering but the overall trend is lower with bounces possible.  $6.40 in the June is now a form of a double bottom which if taken out should allow a break to the $6.30 to $6.35 level fairly fast.  

Dollar - Very quiet today with more economic reports coming out in the next few days.  A bounce to 88 is possible but it will be a selling opportunity.

Monday May 16th - 

General Comment  - A little short covering today in front of this afternoons crop updates and more talk of weather concerns.  Rain is expected over the corn belt this week but after that, the 6-10 day forecasts are a little drier.  We will se if they stay that way in this afternoon's forecast.  I really expect this to be a slow starting weather year.  In other words, we will go through several false starts before heat becomes a real factor.  Look for rallies and then sell offs with good volatility like we saw in the beans at the close today. 

Rice - We should stay in this range as again, we are in fair value. I still think we have a good shot at $8.00 in the July especially if we can get a weather market cranking in the grains.

Natural Gas - We are against support levels where buying surfaces on breaks.  I think June may trade down to $6.30 or even $6.25 but PB is 35% and the lowest it has been is 31% on May 4th when the market low was $6.45.  Today's low was even lower at $6.40 so we have divergence showing which could mean a bounce is nearby to once again balance the deck.  Resistance is at $6.58 to $6.62.   Crude bounced off of its low today creating a spike so further buying in crude may spark a rally here in Gas to consolidate the market.

Dollar - Today's action may be indicating a nearby top.  That is the first sign of a major top but there is no sign of that happening just yet so we'll start watching it very closely.

Thursday May 12th - S&D Report Today

General Comment  - The carry-over numbers were in line what we expected but not what the market was looking for apparently as we turned lower today after the USDA said Corn stocks would be even higher at the end of next year.  That assumes good weather for the whole US which we continue to believe is not likely.  Dry conditions are already showing up and any heat will start to get this market thinking weather premium.  Our objective is to sell a bounce in the next 3 to 10 weeks as we go through the weather market.  We will probably sell futures or cash and buy calls just in case there is a problem.  In fact I might buy the calls first and then sell the futures after the bounce.  In any event, there is little reason for producers to sell as the market approaches loan and that is where we are.  I expect farmer selling to dry up but the funds will press the bear side until they have to get out ALL AT ONE TIME.  This is no time to be pressing the short side.  We have already bought some calls and will buy more on a break.  Also, we took off all hedges today in the new crop as it approaches the loan level and the LDP will protect us near term.

Rice - I don't know why so many people are so bearish here.  The report indicates rice is fairly prices and while it may go 30 lower or 30 higher, it is in the range we should expect near term.  On a weather scare in the grains, rice can move higher as heat can be a huge enemy even though the rice is flooded in water.  I think we are headed no where near term unless hot weather enters the scene.

Natural Gas - We remain bearish here but want to start thinking weather scare in this one as well.  A real hot spell at any time will send Gas higher so we want to be smart and price in some gas on this break.  We still have hard targets in Crude down to 47.88.  Once we get there, we may get a little more aggressive and get more coverage on purchases.

Wednesday May 11th - REPORT TOMORROW

General Comment  - The market is looking for the report to show another increase in the carryover numbers in Corn and Rice while Beans may get pulled lower again.  There is no reason to make any comments because they will change with the 7:30 AM report tomorrow.  I'll have an update here around 8:30.

Natural Gas - The market has rallied, closed a gap and tested some of the resistance points.  Today's close looks to set up a test of $6.55 in the June and if that level is taken out, we may see a slip toward the $6.40 level.  I do not want to see Friday's high taken out at $6.84.  Once again, we have a hard target in the crude to $47.88 and today's close may indicate a turn toward that level.  Tomorrow's gas inventory number will be interesting.

Friday May 6th - Updated at 12:00 Noon

General Comment  - The beans are up a little stronger today.  Corn tried to sell off early but is back to unchanged.  How cocky are the bear right here?  I understand some are saying that the good pace of plantings will allow the USDA to increase their yield estimates above trend line in the May report.  Right!!!  Like that is going to happen in MAY!!!  When the bears get cocky like that, we are near the bottom and I think that's right.  Not that we are going up anytime soon, it will depend on the weather; however, I do think we want to be in options very soon.

Natural Gas - Read last night and you'll see we thought the June could close its gap.  It did that this morning and then sold back off in a quiet trade.  I'm not sure where we go from here but I still like the short side.  There is nothing yet to turn us bullish but if we start to get some heat in the US showing up, it could turn on a dime. 

Thursday May 5th - Short one tonight

General Comment  - Nothing different then said last night on the grains.

Natural Gas - The action today showed again good buying on dips.  Look for the Gap at $6.78 in June to get filled and then we'll see what this one has in it.  Be sure to read last night's comments.

Wednesday May 4th - 

General Comment  - Corn bulls should not get too excited about today's action as it looks like sellers are awash just a few cents higher.  Near term, I see the market still lower with all of the fundamentals bearish and now the weather threatening to provide perfect planting, establishing and growing conditions.  Then just when everyone thinks it is safe to go to the bank and take some of the profit we're going to get growing all of this corn for nice trip to Nashville, bang..."what weather problem you talking about man!!!"   It happens a lot and I think it is setup big for this year.  In any event, with the price where it is, why would I want to sell anything here.  We'll let loan be our support in new crop and wait for the possibility of a turn in weather fortunes.  One more point, I'm looking for a weather SCARE not a problem.  All it takes is a scare and we will be off to the races in almost a panic mode.

Rice - I still look for $8.00 in July and the question then becomes, "what now?".   My longer term forecast is this, I look for the S&D report to cut the carryover between 2 and 4 million in long grain.  This is the impact from the Iraqi sales.  Then if we can get November into the $8.25 level, I'm starting to sell the new crop.  I have a good strategy for that and you in our market system will get the skinny on the details in the next few days.  I see a good break coming here before harvest with the current fundamentals unless the Iraqi sales become more and more like clock work and double, which is not out of the question over the next 12 to 18 months.  Bottom line...Long holders get ready to sell and sell fast.

Natural Gas - Today's reversal needs to see some follow through buying tomorrow to establish a correction cycle.  I see the gap on the June chart at $6.78 as a first target if we move higher near term.  The major trend line is much higher and the market has move too far away from some of it moving averages.  Even so, a rally here can be sold with still no fundamental news out there to indicate a large increase in usage is about to happen.  One more thing...today's low in unleaded gasoline was right on the downside target of $1.4200.  We may need to see crude and gasoline re-check their downtrend lines.

Tuesday May 3rd - 

General Comment  - More great weather forecasts pushed corn lower.  The market is starting to price in the same type of yield we had last year and while I won't say we absolutely will not be that high. I'll still say odds don't favor it.  Some of the longer forecasts are not so rosy but they are way out there so we'll give them a chance to simmer heading into summer.  Yep...we are going to simmer into summer!!!  Anyway, we have made recommendations which have been hit in today's trade and will follow them up with more in the next few days if this attach against new crop continues.  Soybeans look to be holding above support which may be the case especially if we go from "won't it ever stop" to " will it ever rain again?".  We like this break believing there will be a weather scare in the next 8 to 12 weeks.

Rice - If you read our comments last night you'll notice we are not extremely bullish but today's close is huge and it sets up a move to $8.00 in the July.  I don't see any resistance up to that price.  WMP was unchanged today but the 22 cent gain in futures is tied to 360,000 tons of rice to Iraq.  ALL TO BE DELIVERED THIS MARKETING YEAR.  That is the big news.  We thought we would get the rice but the question has been if would all come this year and now that appears to be the case.  Volume was heavy today which is another positive sign.  We are still long but again, will want to take a hard look at holding those positions as we move toward $8.00.  The next US Demand and Supply table is going to be interesting.

Natural Gas - Today's action in crude was an inside day closing near the lows of yesterday but we never took them out.  Natural Gas on the other hand, did take out yesterday's lows and sets us up to test $6.25 in the June.  The volatility at this level is interesting and could indicate some stronger buying starting to surface as we head lower.  I'll need more open interest numbers to see if that is true.  $6.50 may be some psychological support but I don't expect much.  PB is at 33% so we have room to aim for our next objective of $6.40.  Remember, the lower this market goes, the higher the risk for buyers of gas IF this summer turns off to be a barn burner. 

Monday May 2nd - 

General Comment  - So much for a gradual drop.  Here is a BIG issue.  We have been talking about the China currency calculation for months with our producers and comments here on the site.  We strongly favor and hope hat China will allow their currency to float against the dollar at some point.  Well, in answer to the call for valuation change, there was rumors last week that China was going to revalue their peg with the dollar that would increase their currency valuation.  THIS COULD BE HUGE!!!  Rice would be a big winner if this happens but in general all of our Ag markets would be winners.  Lets keep our fingers crossed. 

Today, the forecast for good DRY weather the next seven days sent the market lower with above normal planting percentages expected in today's progress reports for corn.  Soybeans held up as traders think about good planting for corn lowers bean acreage.  LOL...I doubt that!!!  Anyway, remember, when the market goes down on dry weather, it is not ready to setup for a drought weather scare which is what we want to start pricing in some sales for 2005.  Patience is need the next few weeks as we make the change but get ready.  We will give a buy recommendation tonight on the phone update for you in our subscription service so be sure you check the PFM Market Watch tonight.

Rice - The big move last week was balanced out today as expected.  (Read last Friday's comments below)  The close was better then many expected and could indicate good buying at lower levels.  For now, I have no reason to believe we are going a whole lot higher ($1.00) soon; however, the next few weeks may see rice be able to push over the recent highs and move toward $8.00.  On the China issue, remember, it's not just China to consider.  If they revalue their currency, you can bet Thailand and Viet Nam will allow their currency to change as well.  They are trying to keep up with China, not peg against the dollar.  A change like this in the Chinese currency will take the WMP of rice higher in dollars and make our rice more competitive.

Also, rice is not the biggest and most important export product of Thailand and there is a lot of other products that will swing the heavy weight on valuations.  So while rice farmers in that country could cringe at the idea of lower US prices compared to their currency, odds are they'll just cringe and that's all. 

Natural Gas - The day started as another consolidation day but the late push in crude oil rallied the market around 12:30.  It seems for now that crude is driving this ship and just when we think it is safe to look at true Natural Gas fundamentals, crude raises its ugly head.  Long term we have support at $6.25 in the June contract and think the market belongs at that level.  With the weather starting to normalize, the concern for buyers has to be the summer weather picture.  Right now, there is no sign of heat which could start to equalize the demand and supply picture in Natural Gas so we remain on the bear side knowing a bounce is possible.  If we can take out today's highs, we should see good selling in the $6.78 to $6.86 range and then up to $7.20.