Tuesday November 30th -

Corn - Inching toward our $2.00 target in March.  Light day today and there is no real reason to think anything big will happen before the 1st of the year.  Look for deliveries to be a non-event.  We still see a saucer bottom as possible which means a more sideways tilt over the next 6 weeks.  We are not in here yet but may buy some of our cash sales back before Christmas.

Soybeans - There is no reason to buy here yet and I wouldn't be short either.  More sideways action is possible but we have now had several down days in a row so a little bounce could happen.  PB is still higher than the rest of the grain floor at 47%.  A gradual down move remains likely over the next few weeks but it could change in an instant if something in the world fundamentals change.

Wheat -  Well, we got our bounce out of wheat as expected but there was little follow through to the upside.  If you read our comments form last night you'll see we thought there would be a pop and that happened in the first 15 minutes and then the market drifted lower and actually took out yesterdays low.  We got our buy signal on the close but it was too late for us to buy it.  A buy signal tomorrow runs though the $3.02 1/4 level.  We may take it and stop it on today's low.  Open interest continues to decline and it sure looks like the specs are out.  This could fuel a rally at some point but it will take a scare for a big bounce.

Rice -  Welcome back!!!  Some of you have been gone for a while as the rice market has been doing nothing.  Today the market did something and that is why your reading this, but will it hold tomorrow?

Major buy signals today as the rice market bolted through our resistance points of $7.23 and $7.33.  That was the signal to get rice bought in the January contract.  PB is up to only 61% and volume today was very heavy.  4 times the number of trades (that is not on a contact basis but trades only).  If you are not familiar with our recommendations, read our comments below, day by day, but especially read the comments of November 9th, 10th and 15th as we have bought back 30% and after today, we got to almost 50%.  WMP was unchanged today and that MAY give us a chance to buy back lower; however, we must not get caught here trying to catch the market.  This is a basis buy back position where we have sold the cash getting a very high basis and now want to replace the positions with futures.   

Let's talk....(another way of saying, "this is going to take some time).  The fact that WMP was not raised today when many thought it would (including me), may have little to no impact on the futures market tomorrow.  The reason is simple, the market is not going up because the USDA WMP committee may raise prices, it is going up because the price in Asia is going higher.   Mark my words, the WMP is going up, it just isn't going up today.  The little black box used by the USDA is there for one purpose, to make sure US rice remains competitive on the world market.  If we assume, Thailand is headed for $300 per ton on its 100% B grade rice, which I think is a good assumption, we should see WMP equal to loan in the process.  If we see $320 a ton or higher, we should see $8.00 to $8.50 futures prices in the process.  Also, look at the basis now.  Here in Texas we have gone form $1.50 to zero on the basis levels.  Selling all of our cash worked perfectly as long as we get back into the market right.   

I bought rice again today on the breakout and now will have to sweat any disappointment in the unchanged WMP; however, I think traders tonight are saying, "So what, the WMP is not up today, which means it will be up next week or the next unless the USDA has decided to keep our prices as low as possible for as long as possible to get the demand jump started."   I agree with that thought...it will happen in the future and this market may stay firm until it happens.    

Tomorrow will be interesting.  If we take out today's high, I'm buying more and will probably get to 70%.  Especially if we close higher.  Going in, I'll hope for a break back to $7.35 to $7.40 as a buy back point as well.  In fact, I may get both a break to buy and new highs.  How high can we go?  Well, there is no resistance up to $7.65 on the chart as we could close some old gaps.  The real resistance is up at $8.00.  That seems like a good target if we can work higher in the next few days.  Just remember, the technicals in this market are pointing higher. 

Monday November 29th -

Corn - As expected, the market made new lows today and didn't show much sign of reversing back to the upside.  $1.90 is support in the December contract with the $2.00 mark possible for the March.  We may accordion for the next few months as we work through this huge supply of corn.  Longer-term, this market will go higher as the demand base is huge and eventually, people will figure out its time to buy long-term coverage.  Don't expect that until after the first of the year and maybe into March.

Soybeans - As we have been saying, the market should work lower.  Rust was not a good reason to go higher.  Today's action probably balanced the situation but near-term, there is little reason for a rally unless we start to hear something bad from Brazil.  I doubt that happens anytime soon.

Wheat -  Thank goodness we bought back the position last week.  I said last week I was probably wrong to try and pick a swing bottom, and dang of I wasn't right...I was wrong to try and pick a swing bottom!!!  Friday's break left the market vulnerable to a test of the $2.87 level in December which was taken out today and the market closed right on it.  The funds covered shorts going into last Tuesday's trading session and with the last few days under pressure, it appears that the selling is coming from Specs getting out of the market.  This gives me hope that the selling is about over.  As for us, we are out and glad to be that way but will be watching tomorrow, why?  Read on!! 

I expect a pop tomorrow.  Here are five reasons why:

1)  The market rallied up on the end tonight when some local shorts found no sellers of volume to take on their shorts for the day.  That is a sign the selling dried up.

2)  We have been down 7 days in a row 

3)  The 30 minute PB dropped under 10% in the last bar of the day 

4)  We have sold off over 30 cents with no upside correction

5)  Small Specs are out of most of their long positions

If the market opens higher, I'll give them what they want buy the first dip for a short term trade and stop it on the low.

Rice - Nice comeback....We tried to went  lower earlier in the day but reversed back up into the close.  This pushed PB back up to 46% and still indicates we are sideways for now.  I expect WMP higher tomorrow as we are seeing much higher quotes overseas.  I hope you have locked in that LDP rate.  It's going to zero.

Natural Gas - Like I said last week...the rally may be over.  I wouldn't trade this with your money unless I knew you didn't know where I lived.  PB is 61% and we could go either way but one thing is certain, which ever way we go, it will be a violent move.

Wednesday November 24th -

Corn - Dull holiday trading to say the least and I expect more of the same on Friday so, I'm taking the day off.  Near term we may see new lows as the market may be setting up a "saucer" bottom.  

Soybeans - Well, so much for late trend indications.  Today's sell off is more what I expected early in the week.  Next week will be interesting but I still see this market lower than where it is right now.

Wheat -  If you read again last nights comments, I still see December wheat pinned against the $3.00 strike price.  This will be interesting.  We modified our position today by buying back all short puts and selling March puts to replace them.  We lost about 3 cents on the trade in the $3.10 puts and made about 3 cents on the $3.00 puts so we broke even and were able to move into the next month.  We sold the $3.10 March puts and now will brace for new lows in wheat next week.  Why?  The current talk is negative with the fundamentals.  Even with good sales, the bears have the market heading in their direction and they will add to sales until it hurts.  I'm thinking a weather scare is still possible but maybe not until early to mid-December.  A close back over $3.15 in March would slow the selling and get the funds a little concerned.  Even so, the fact remains, the funds are historically short here and when they start coming out, there is going to be some real gravy to pick up in all of the sloppiness that is a short covering rally.

Rice - Not bad trade volume today for a short session.  The market showed us nothing so I expect that on Friday. 

Natural Gas - WOW!!!  We have been telling you to expect a bounce here and we certainly got that today.  Heck, it may be over all ready .  What I'm trying to say is that the bounce today of over $1.00, is big enough to right the ship.  PB went from 41% (I had forecast 40%) to 59% in ONE DAY!!!    The retracement level in January is $9.10 and the high today was $8.65 going into the close.  We want to sell a rally but will need signs that the rally is over first.  A lot of bulls out there are breathing a lot better right now. 

Cattle - It's official.  No Mad Cow.  Did you hear that on all of the new shows today?  Nope, I didn't hear it anywhere.  They did hear it in the cattle pit.  Market sharply higher and there is good demand.  In fact, demand didn't suffer at all during the scare.  Friday will be a day to catch your breath here.  

Tuesday November 23rd -

Corn - Nothing changed here today with a very quiet trading session.  Tomorrow should be dead as well as Friday.  We might see December "pin" against the $2.00 strike price over the next two sessions.

Soybeans - The market continues to work higher with another up day today.  I expect it to be slow tomorrow and Friday but who knows.  Sometimes these slow days are the busiest.  The one thing I like about today is that the early morning trend reversed in the afternoon.  That could indicate we still have more strong buying to go.

Wheat -  What else is new.  Another down day as the funds keep getting short.  The market was slow today and looks like it wants to pin the market against the $3.00 strike price in December.  The $3.00 put and calls have 3300 contracts in open interest so we may close on Friday right against $3.00.  This is called "pinning" the market to where the open interest is in the options.  There is 5900 open interest at the $3.10 strike.  We remain short the $3.00 and $3.10 puts and expect to be exercised on the $3.10 option.  That will put us long but we won't be there if the market moves under $2.96.  Long-term we see the huge fund short position as a great opportunity (as do the commercials right now).   Once the December options expire, the funds are going to be a little more naked then they want to be and that could bring about a rally back to resistance levels.

Rice - WMP was unchanged but the market was up a little on the day as we continue to hear of higher prices overseas.  The US dollar was sharply lower today and that may slowly bring about more interest in US rice.  This market is still too hard to call but it looks sideways between $7.30 and $6.90 right now. 

Natural Gas - The market tried to rally today but once again found sellers after taking out yesterdays high.  PB is at 41% and the crude was higher big time today.  The longs in the market remain the specs and they are in trouble.  That may be the main fundamental right now.   

Cattle - Rumors are flying that the test on the possible "Mad" cow was negative.  The USDA say's the tests are not completed.  Who knows, but one thing is for certain, if this test is negative, the next scare will be a nothing for prices.   Market still looks good but thee is a cattle-on-feed report coming that could have an impact on prices. 

Monday November 22nd -

Corn - This market seems destined to make new lows and there is little reason for it not to.  PB returned to under 50% today and buyers seem to be all bought out through the end of the year for cash needs.  The bears are in control and they can stand in this situation for a while.  BTW, the basis is still good in Texas and in fact, I would argue the basis is better then recent years.  Probably the cost of barge freight helping us near the coast.

Soybeans - Up today but no real conviction as beans are held in a range for the last couple of days.  Funds really love to be long beans and they go nervous on this run up and bought back their positions by over 40% so now we will see if they want to take a position.  I expect a quiet finish to the week.

Wheat -  Another down day as wheat sold off in the last 15 minutes to make a push for the contract lows which are now just 6 to 7 cents away.  PB dropped to 43% which was good enough for me so I bought back my longs on the close.  This may be a mistake, but I know right where I'm wrong and will get back out if the market doesn't recover from here this week.

Rice - Higher today on low trade volume.  PB crossed back over 50%, but that doesn't mean a thing.  Remember, a sideways range will see the market go back and forth across this technical centerline.  I think that is where we are right now...sideways.

Natural Gas - Still no rally to sell here as we go lower with no real strength.  PB is at 42% and I expected 40% to be the bottom of this move but then again, there are enough small specs caught in the long side right now, this may not be the case.  They are getting squeezed big time and eventually, they will head to the exits. 

Friday November 19th -

Corn - Last night we said we doubted the rally was over but the corn "could dip back below $2.00 with just the normal flow of sales to the pit this time of year."  That happened today and it shouldn't have.  I would say today was a really bad day as the funds once again sold the market after we failed to work higher earlier in the day.  The tilt of the market is absolutely flat after turning higher earlier in the week. PB remain over 50% but if we are going into a sideways trade, look for the PB to drop down toward 45% and then find support for the longer term.  My guess is we will test and may very well make new contract lows but it should be bought if you are in a buy back situation.  The funds are being allowed to have their way with the grain market, but market my words, they will pay much of it back before its all said and done. 

Soybeans - The beans are vulnerable to the same sell off that the corn and wheat had today as they setup a sideways trading range as well.  The other factor here is South American weather.  A surprise in that area could bring about a sharp move higher or lower.  PB remains at 61% tonight and of all the grains, beans held up the best today.  I wonder how short the funds are here?

Wheat -  Last night I wrote..."I still see the funds exiting huge short positions and they have quite a way to go.   Tomorrow is Friday and again, the market likes to close in the direction of its trend and that may be higher."  WRONG, WRONG, WRONG, WRONG, WRONG!!!!  We had to dump our long futures today as the market dipped below $3.11 in December.  In my mind, today should not have happened but it did.  $3.05 is where I will buy back my long for a short term, low risk trade.  We remain short the puts at $3 and $3.10 since we have nice profits there even with the market selling off.  I heard funds were the big sellers today so they must really love the short side of wheat.  PB is at 50% and the tilt here is higher but just barely.  Fact is, I think we are going sideways here and the market will stay volatile until the funds get to a more manageable position. 

Rice - A real do nothing day.  I still think we are in a sideways market for now.

Cattle - Another Mad-Cow scare but the market looked today like it doesn't believe it.  I learned a long time ago, never trade a market with this kind of fundamental as an unknown.  Take your shot in Las Vegas because at least you know how much your going to lose. 

Natural Gas - A key reversal up today from over sold conditions.  The close was almost equal with last week's close.  I still see a bounce to sell coming.

Thursday November 18th -

Corn - Is the rally over?  Well it could be but I doubt it just yet.  Funds may have taken a day off from exiting the market.  We will see in tonight's volume numbers.  It seemed very slow today and a lack of volume may be an indication that the funds are going to have to pay up to get out of those shorts.  Even so, we could dip back below $2.00 with just the normal flow of sales to the pit this time of year.  The funds and the commercials will play for the power when one of them has to jump.  It won't be the commercials.

Soybeans - A slow day but once again we moved higher.  I can see beans stalling here in the next few days as we see the concern for rust start to dip.

Wheat -  The market tried to rally toward that $3.23 resistance point but found heavy sellers at the $3.20 level.  The market action today was over in the first 30 minutes as the high and low were both set in that time frame.  Now we will wait to see which way we break out of that trading range and what happens after we do.  I still see the funds exiting huge short positions and they have quite a way to go.   Tomorrow is Friday and again, the market likes to close in the direction of its trend and that may be higher.  We remain long futures and short the puts at $3 and $3.10.

Rice - Another down day with PB now at 46%.  It looks like we are sideways and I will want to buy the market on this dip with a stop if we get into new lows.  I can see that happening and I can see the market holding sideways here for months.  I can also see futures rallying in to the upper $7.00 area.  Fact is, I can't see anything with any certainty except, and I'm a broken record here, the basis level falling.

Wednesday November 17th -

Corn - We continued the short covering bounce today.  These type's of bounces may not carry too much higher as we expect a dull type trade coming for several weeks.  Near term we could get another 5 to 10 cents.  Again, we want to sell CASH corn if March gets above the $2.20 level.  With the current basis levels we have, that would give us a good price to cash in on the corn we hold.

Soybeans - Rust concern is causing the shorts to come out.  This si not q problem for this year but next so don't out much faith is a "RUST" rally.  It is short covering and when it ends we will sell off as fast as we came up.  PB is up to 58% and I expect problems in getting it much over 60%. 

Wheat -  PB has crossed the 50% line switching the control to the bulls.  This is really shorts coming out but they have nothing to hang onto right now except maybe the beans selling off in the next few days.  As we said last night, we should have some strength here as the shorts cover from a record short position.  $3.23 will he hard for December to get through on this first push.  Even so, as I have been saying, an unexpected bullish event could get this market crazy.  We remain short the $3.00 and $3.10 put believing they will finish at zero value and we have gone long futures at $3.10 1/4 for a short term trade.  I will take off the futures as it crosses $3.20 (fingers crossed).

Rice - This market has stalled big time and now it looks like it is setting up the sideways trading range we have been expecting.  PB is at 53% so it is still holding over 50% but new lows tomorrow will probably turn the market back down. I want to buy March if it trades down to its support zone at $7.07 or about 20 cents lower.  This is a buy back on Basis sales only.  If the market breaks below $6.90 (march), then a new bearish leg has started.  If that happens, we will exit all long positions and go to the sidelines.  Again, it could go either way but odds are against a new leg right now.

Tuesday November 16th -

Corn - It is getting very dull here.  I expect that to be the case for weeks.  There is little news to change the current situation so as the funds come out of short positions, we could see a bounce to the major resistance point.  I think that level is $2.15 at the highest for December.  A move over $2.20 would be a hedge zone in the March contract.

Soybeans - Nothing new here.  PB is up to 58% and I expect problems in getting it much over 60%. 

Wheat -  PB is now at 49%, the market has closed in the upper end of its range, and it closed over $3.10.  We should see more strength near term as the record short position by the funds must be alleviated.   Any type of bullish news could cause a stampede to the exits for the shorts in this one.  We remain short the $3.00 and $3.10 put believing they will finish at zero value and we have gone long futures at $3.10 1/4 for a short term trade.  That was done today when the market confirmed a trend day higher just after noon. 

Rice - We were lower by 9 cents earlier in the day but managed to close near the highs but still down on the day.  PB is at 53% so the tilt remains higher but I wouldn't be surprised to see this one drift back below $7.00 in January.  I still can see it both ways. 

Natural Gas - The reversal yesterday did not gain traction today so we may still not be ready for the sucker surge.  This could turn off bad if it keeps going down and instead of a sucker surge we may just fleece the longs.  That is the best situation if your short.  PB is 41% as of tonight so there is room to go any direction easily.

Monday November 15th -

General Comment -  All of the markets worked higher today except for rice.  We have not received the current COT report yet and hope it is out this afternoon.  That should help shed a little light on what is happening at this price level.

Corn - Corn held well today as it absorbs the latest USDA numbers.  PB is up to 60% and we could see some short covering come in here on a move above $2.07 in the December.  Long-term we still the market dying in a 10 cent range through the end of the year.  One rally is possible to help clean up the open interest and then, its going to be very dull.

Soybeans - Strong demand fueled the rally here in beans, that and the fact farmers are not selling at this level.  This could change if things really go great in Brazil, but if a problem sown south develops, we could see a nice bounce here; however, don't count on it.  I will use any rally to sell near-term.  The long-term numbers just aren't that good.

Wheat -  PB is now 46% and the market remains under $3.10.  A close over this level will start a nice rally.  We are in that time of year when weather can become the main focus and even with a large world supply of Wheat, local prices could adjust 15 to 30 cents higher if a winter time weather scare starts to occur.

Rice - Today's close is sitting right on its 9 week moving average.  It is about 15 cents over the 21 day moving average and the PB is now at 56%.  This sets the tilt as higher for the January contract but it needs a close over $7.23 to really put this market in an uptrend.  World supplies are not as tight this month according to USDA and this may allow for some easing of world market price increases but Thailand prices are a little higher today then last weeks which sends the opposite message.  Simple said, I don't know.  The technicals seem good for price increases but the fundamentals are bearish at least as far as the states are concerned.  Cash prices are higher than the futures in Texas but that has been the case for several weeks.  I'm still of the opinion that Texas cash and Futures need to get closer.  That means selling cash and buying futures if we are in a bullish tilt.  That is what we are in so....we are long some but not all of our crop. 

Natural Gas - Last week we talked about a sucker surge to sell.  I thought it had started on Wednesday but it failed to gain traction.  Today's action was a reversal pattern indicating a possible rally again.  If it follows through tomorrow, we will have started the sucker surge.  I'll stay out and sell the rally when the time is right. 

Friday November 12th -

This mornings USDA REPORT --

ENDING STOCKS - in MB  (Million Bushels), MH (Million Hundred Weight)

Corn -    1,819 MB - Average Guess - 1,794 MB - Last Report - 1,691 MB

Soybeans -  460 MB -  Average Guess - 462 MB - Last Report - 405 MB

Wheat -568 MB - Average Guess - 546 MB - Last Report - 569 MB

Rice - 41.8 MH - Average Guess - 40 MH  - Last Report - 40.7 MH

General Comment -   In general the report was bearish but that is not how the market closed.  We started lower in everything except rice and came back with reversals in several markets including Corn and Wheat which both came back from new contract lows.  The next week will let the dust settle and we will see if we get any more short covering out of the funds.  Also, we will get the new COT report this afternoon which I expect will have the funds up in short positions.  We will have those numbers in our weekly update.

I will not go into the specifics of the report here as will have our monthly analysis posted this weekend; however, the report confirmed that the bearish surprises are finished.  That doesn't mean we won't have more bearish reports but it does mean that they will not be much of a surprise.  If you read our long-term analysis, you will know we expect the Supply-Demand Phase II of the market to be sideways to dull.  It will take bad weather for the crops in South America to allow these markets to rally anytime soon. 

As we close the week, the PB has a bullish tilt on Rice, Corn, and Beans but is still bearish on Wheat.  Today's reversal may change that next week. 

Thursday November 11th -

General Comment -   There is no reason to make many comments tonight because of the USDA report tomorrow morning.  I will update the daily comments after the close tomorrow but I will try and have an early morning update as well to give an idea of the tilt of the market with the new numbers.

All of the markets finished off a little as they brace again for USDA numbers which have been bearish every month lately.  Today's action in Rice was bearish but again, it really may not matter with the USDA numbers tomorrow.   We will write a full WASDE analysis and post it over the weekend.

Wednesday November 10th -

General Comment -   S&D report on Friday will tell a lot about our direction here for the next few weeks.  The COT report shows the funds as short the world in all commodities (except rice).  If this report is at all bullish, we could see some swings higher.  The bottom line is that IF there is going to be a surprise, my guess is that it will be a bullish one.  Oh, and by the way (BTW for future reference), I said this same thing last month when the USDA produced the most bearish reports I had ever seen.  Just wanted to let you know I hadn't forgotten.  Hey, if I say it long enough, I'm bound to be right.

Corn - Good short covering in the morning as some weak shorts got the heck out of Dodge, but the market didn't hold as new sellers took their place and the market closed back down to unchanged from Tuesday's close.  That wiped out a 5 cent gain on the day.  Most of the talk today was about rust in the soybeans, specifically in Arkansas and Louisiana.  If it's there, it will be everywhere.  So let's see, we rallied 5 cents in corn on POSSIBLE rust in the soybean crop that is about harvested????  Yes and I saw a herd of elephants FLY past my window just now.  That doesn't make sense but then who ever said the markets make sense.  I remember my professors saying the market was efficient.  Well, explain today as being efficient and I'll believe it. 

Fact is, the market moved on a frenzied buy wave and then when it corrected it found the reason for being higher non-existent.  Or, it could be that someone knows more about the USDA numbers this Friday then we do and just got out of all short positions.  PB went from 37% to 51% on the move today and balanced the market which takes away any chance for a major oversold condition (below 20%) at the bottom. 

Soybeans - Rust in the beans in the south sent the market sharply higher as everyone ran for the exits.  Talk about over re-acting!!!!  January PB went from 34% to 57% on this move and put the shorts on notice that the buyers were back.  Rust is not the reason for beans to rally in January futures.  We will see what the USDA says on Friday about the actual supply and demand of beans and what is happening world wide.  Who knows, we may finds a reason to be long in those numbers or we may find a good reason to be short.  Market may be still active tomorrow depending on what news is out about the rust issue and its perceived impact.  

Wheat -  Short covering in Wheat on the rust issue as well today.  PB finished at 47% as the market failed to take out resistance at $3.11 and gave back its 5 cents gains early in day as well.  I still think the market is sideways and being short the $3.00 and $3.10 put is still not a bad play.  If the S&D report is bearish, I expect that to finish off the bear side of this move very fast.  In fact, a bullish response t a bearish report is very likely.   

Rice -   WMP up 15 cents and the market quietly followed higher today.  That is a good sign since we have rallied over the past three days and the market is going long.  We actually got a little over bought so some consolidation here is not a bad thing if we get it.  PB is 56% and holding.  This indicates the buyers are in control right now.  Look for a slow day tomorrow with the report on Friday.  I expect the USDA to show the world picture tighter as Thailand is coming in a little lower than expected last month.  A close over $7.23 is an out right buy signal for sure.

We have started to buy back some rice sales.  30% is good level to start at given the current supply of rice in the US.  It will take the world picture higher to take rice much over the $7.80 to $8.00 level.  Again, I expect WMP to rise to the loan level.

Natural Gas - The quick rally we talked about in our weekly comments has now begun.  If I had any guts I'd play this one but I expect the correction to end quickly so we will wait for the turn back down.  I mean, I did call it a sucker surge so I'll stay out of that category.

Tuesday November 9th -

General Comment -  Don't you just love computers???  Sorry, we had some problems but we're back up and running.  You didn't miss much unless you were waiting for our sell recommendation in Natural Gas...Well, we missed it too!!!  Read on.....

Corn - We have the S&D report this Friday.  I expect the market to make a new contract low right before or after the report.  Longer term, we will begin the transition toward the demand phase of the market.  PB still stands below 40% and that will let the market extend lower near term.  Again, read my comments below on Friday regarding the basis and corn prices.

Soybeans - January beans are holding over $5.00 with all eyes now on Friday's report.  January PB is still at 34% while December Corn is holding at 37%.  This report should end most of the speculation on the size of crop and now we start to see if there are any holes in the demand side of the market.  The trend is still down and that's what we will watch for a few weeks if not months.     

Wheat -  With a record net short position for the funds, I wouldn't be short this one at all.  Today's high was $3.10 and brought the PB has increased to 49%.  I think the market is sideways and being short the $3.00 and $3.10 put is still not a bad play.  If the S&D report is bearish, I expect that to finish off the bear side of the market. 

Rice - Buy Signals Today!!!  On top of that WMP was up 15 cents.  Yesterday's rally was on short covering which means sellers bought to exit their positions.  This is not that strong of a signal and may be a result of the higher prices quoted around the world along with the fact the WMP was expected to be higher today (and it was).  Tomorrow will be very interesting as we see if the market rallied suspecting this increase or on conditions that still have the buyers in control.  PB is at 55% which setups the buy signal.  On top of that, the close today was over the trend line drawn from last June's highs.  A move over $7.23 could bring in more buying but I'd like to see a close over that price before buying into this move.  One thing for sure is that it is looking better than last week and the long-term target of $6.20 in March will be a memory on a close over $7.23. 

Let's talk...  If you have sold all your rice and are looking to buy back, there is two ways to do it.  Buy options, or futures.  An option strategy is going to be expensive to give you any kind of normal protection but will limit the risk.  If we pull the trigger on buying the market back, you are going to have a hard decision to make.  I think options is not the way to go right now for one major reason.  The US carry-over is going to cap any rally until April.  Buying a March $7.60 call is only good until Mid-February and so a 37 cent call means the market will have to rally 60 cents just to get you to a guaranteed break even (remember your friendly broker in this calculation).  I think the options are fairly priced but the odds don't favor a major move until late Spring.  If we need to buy back, we may do so with a long futures, long put strategy instead of the call options.  More on this later. 

Natural Gas - The break we have been awaiting for came really fast the last two days.  PB has corrected to 43% down from 80% just a few days ago.  I didn't get my calls sold but I was right on the idea.  Dang I hate it when I'm right and don't make money.  We might get another chance, as we wait to sell any rally.  Yep, us and the whole dang world!!!

Friday November 5th -

General Comment -  I have heard some comments on my remarks regarding Farm Bureau and the election on Wednesday the 3rd.  For the record, it was the Texas Farm Bureau I was talking about and not the American Farm Bureau Federation.  It's the leaders in Texas that need a "who they're working for" reminder.   

Corn - The market continues to hold the lows as we finish up the 2004 harvest.  I have no changes in my ideas as I look for the market to be sideways near-term.  I think the odds are 50-50 we make new lows but feel a buying opportunity will exist when that happens.  Remember, the S&D report next week could have an impact on if prices can make and hold new lows.

BTW, the Texas basis levels are a major point of discussion right now as buyers are telling sellers to get read for a drop in the basis.  Now what's wrong with that picture.  Currently, the basis for corn is 10 to 12 cents higher than last year at this time and I see no reason it won't stay firm.  Yes there is a huge crop of cash corn in the Midwest but the cost of transportation is the main reason to expect the basis to stay strong.  The large supply of corn will be reflected in the futures price, not the basis.  When the buyers are telling us the price is getting ready to go down, that is a good time to stop and think!!!

Soybeans - New contract lows today as the market is still dealing with a huge supply both here and in the world picture.  January PB is still at 34% while December Corn is now at 37% which is the first time in months, Soybeans has been below corn.  The trend is still down and until we get some other indications, I think this market will stay under pressure.  Remember, the S&D report is this next week and it will have an affect on the market.   

Wheat -  I didn't think the market could rally above $3.08 but it did.  The only problem is it didn't hold above that level.  Today's high is a buy signal as PB has increased to 48% as of tonight.  Also, the COT shows huge short position here for the funds.  Next week could be interesting.

Rice - Still nothing to comment on.  Read my last two weeks comments as its the same old thing.

Thursday November 4th -

Corn - My guess is we will go below the $1.97 level and test the $1.90 to $1.85 window.  This could pull March into our buy point of $2.00.  Near term, the market will drift as we finish the harvest.  PB is 32% which is not oversold. 

Soybeans - Good break today as the market continue its downward trek.  January PB is at 34% so its close to getting to the corn level. 

Wheat -  Last night we told you of the expected 15 minute buy signal which did occur today.  Tomorrow, the market need to rally higher than $3.08 to turn the near term trend up.  I doubt that happens as we have no reversal pattern to fuel a rally.  PB dropped another point to 41% but the oversold condition has been neutralized in the short-term chart.  I expect new lows here before it's over.  I also will be watching for a bear trap.  That is when the market makes new lows to get the bears to sell more and then reverses trapping them in a short position. 

Rice - There is nothing to comment on here that I haven't already said.  Read my last two weeks comments as they still hold my thinking.   

DOW - We broke through the down ward trend line today as pent up demand has really energized the market.  To bad its not on earnings.  I don't trust this rally at all. 

Natural Gas - The market broke below the 21 day moving average and has its sights on the 9 weeks moving average.  PB has corrected to 64% which is still not a sell signal.  I didn't get my calls sold as I expected the market to rally to $9.78 but we only got to $9.40.  So close, yet so far.  A move under $8.60 may cause the market to sell off really quick.  Remember, there are a lot of longs still left in this one and any body who bought in the last 11 days is now in a loser.

Wednesday November 3rd -

Corn - December is holding its down ward pressure and challenging the lows at $1.97.  We continue o believe that the market is going nowhere near-term.  A move under the lows is possible as we put in a longer term low.  I would like to buy March under $2.00 but don't think I'll get the chance.  That means we could sell the $2.00 puts which are selling for 3 1/2 cents tonight or the sell the $2.10 which is trading for 8 cents.  That would put us in position to buy the market at $2.02 if the market broke hard.  Frankly, I think we can sell those puts and pocket the money long term.  So, for now, we will wait for a reason to own corn or sell those calls. 

Soybeans - The pressure on the whole market may be coming from the bans near term.  We are now at the lows and should get through them as I don't look for a double bottom here.  We will need to follow the weather in South America for direction but it is too early to see major upside pressure on beans. I don't have any plans to trade this one right now. 

Wheat -  We have gone to the sidelines, sort of, by being delta neutral.  PB is now at 42% and the market is now over sold with 15 minute buy signals very close to occurring.  The wheat/corn spread is down to $1.01 and there is indications should widen tomorrow.  I said last night I expect the lows tested and possible taken out.  The bounce in the next few days will be very important.  If the PB gets back over 50%, we will enter long positions again s that would be a very positive sign.  Its going to take some commercial buying to do that. 

Rice - Nothing here to comment on.  PB is at 37% so there is room to rally or sell off.  Fundamentally, there is nothing really to hang our hats on.  Premium levels should be dropping but they aren't and that may bode well for a bounce in the futures to get the basis back to normal levels.  January traded 24 times today which is below normal so there is no indication of increased trading activity right now. 

Natural Gas - I show January back to $9.78 on this small rally and possible back to $9.97.  I'm selling the $10.20 or $10.00 call if we trade to $9.78 and taking it off if the market closes over $10.00.  This is a risky trade and not for the weak at heart.  The strength index is indicating a top and future shorts are not advised unless we trade down through $9.02.  This will be fun.

The Election - Well, the good guys won!!!  I'm sure the Hollywood establishment is crying today which gives me a high just thinking about it.  Mr. Moore now knows that the majority of America could think less of what he thinks, writes, or directs.  What a moron!!!

There was some bad news for Agriculture in this election as we lost Mr. Charlie Stenholm here in Texas and that is a real hard blow especially when you think of how it happened.  Here is a good reason not to be in the Farm Bureau.  They are not a smart group of people to say the least.  Why would you want to vote for a non-agricultural republican over a conservative democrat who votes like a republican most of the time and is at the top of heap on Agricultural policy AND has been the best friend Texas Agriculture has had.  I can understand Tom Delay's desire to see more republicans, but the Farm Bureau???  I'm sure Neugebauer is a great guy but he has no standing in Agriculture, doesn't want to be on the Ag committee, and doesn't know squat about Texas Agriculture.  So why did the FB support him.  Because they have STUPID people at the top!!!   I won't buy insurance from them or anything else and if you are a member, you should think long and hard about the people who run this supposedly "farmer friendly" organization in your name. 

Tuesday November 2nd -

Corn - Market is accepting value and that may indicates another push to lower levels.  The close in Wheat today may keep some pressure on here as well.  PB is at 35% so there is room to go lower.  Buy signals are at $2.20 in the March corn tomorrow.

Soybeans - November worked higher against the January contract.  PB is up to 39% for that contract so there is room for more downside action.  Wednesday's can be against the trend days so we will watch for a trend day tomorrow.  I doubt it happens.

Wheat -  Tonight's close is the second under 50% on the Mathematical Percent Bullish so we had to take some action today.  We bought back half of our short puts at the $3.10 level and also sold futures on half of our remaining puts.  That should put us about delta neutral (equally long and short price) in the 3.10's and still short he $3.00 puts out right.    PB is now at 45% and the market closed on the lows of the day so I think we will be lower early in the morning.  In the next few days, I look for the contract lows to be tested and possibly taken out.  The lack of commercial buying is very troublesome. 

Rice - Ho! Hum!!!  No comment.  I thought WMP would be up today but it was unchanged (just like I thought it would be with me saying I thought it would be higher). 

Natural Gas - Holding above the 9 week moving average.  The next few days could be interesting.  I would like to sell the 10.20 calls on a rally in the next few days.

The Election - Since I tell you what I think the market is going to do, I might as well tell you how I think the election will go. 

First, the COT is about even.  The Funds are Bush and the Specs are Kerry with the commercials still undecided.  PB tonight is 49% Bush and 48% Kerry which means nothing as it will be the number of traders tomorrow that decide the whole thing.  Even so, our technical system is never ever wrong, so we have the answer with 100% certainty.   

I know for absolute certainty that #$%^&#*($*&^%#$@% will win the election.  I absolutely guarantee that #$%^&#*($*&^%#$@% wins in a close one.  (For the decipher, please check back with us on March 1st, 2005 and you will see we were absolutely right!!!)

All kidding aside.  No matter what happens, here is the winner!!!.

Monday November 1st -

Corn - The market broke today under pressure from wheat.  There is really no news except technical trading and the funds were net sellers today as corn headed down to test recent lows.   PB is at 35% and as I said last week..."I would like it below 33% before selling any options, so we will give it a chance to settle off."  I still think we will be sideways for a while and then rally later into the winter months. 

Soybeans - A weaker basis is being blamed on the sell off in beans but again, the funds are rejoining the trend late in the game and pushing the market lower hoping for a hard sell off they can buy.  My opinion is they will lose money on this push but we need to see some buying from the commercials to stop the leakage.  Remember, at the lows, the funds lose money as they cannot push the market into selling and have to cover with a loss.  Are we at the lows?  If not, its going to get a lot worse.  January PB is setting at 40% so there is room for more down side pressure.  $5.05 in January is a likely target near term.  I said last Friday, "Next week we may see one pressure but time is not on the side of the bears here."  That is still how I feel.  They had better make  

Wheat -  Tonight's PB rating is under 50% standing at 47%.  This is bad news and indicates the market has more weakness to over come before working higher.  The market sold off due to the other grains being weaker, and the other grains were weaker because the wheat was down.  In other words, the market was down on no new fundamental information, it was all technical.  We remain short the $3.00 and $3.10 call and long the wheat/corn spread at $1.04.  Tomorrow may be a key day as we try and hold on to the current price level and confirm we are in a sideways market.  THIS IS EXACTLY WHY WE DIDN'T BUY FUTURES OUTRIGHT AND SOLD PUTS INSTEAD.  Even with the break today, all of those positions are break-even or in a small profit. 

Rice - PB is back down to 37% tonight.  As I have been saying, I don't have a clue but the trend is down and the technicals are weak.  World prices are holding and I do expect the WMP to be higher tomorrow, so that is a sure fire sign it will be unchanged or down!!!.  The chart still points to $6.00 but I'm not believing it.  We have sold all of our cash rice, are locking in second crop LDP rates tomorrow and selling it as fast as we can and want to buy futures at some point.  The million dollar question is when???

The Election - Since I tell you what I think the market is going to do, I might as well tell you how I think the election will go. 

First, the COT is about even.  The Funds are Bush and the Specs are Kerry with the commercials still undecided.  PB tonight is 49% Bush and 48% Kerry which means nothing as it will be the number of traders tomorrow that decide the whole thing.  Even so, our technical system is never ever wrong, so we have the answer with 100% certainty.   

I know for absolute certainty that #$%^&#*($*&^%#$@% will win the election.  I absolutely guarantee that #$%^&#*($*&^%#$@% wins in a close one.  (For the decipher, please check back with us on March 1st, 2005 and you will see we were absolutely right!!!)

All kidding aside.  No matter what happens, here is the winner!!!.