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Friday September 30th - 3:00 PM -
General Comment - Stocks report
today was bullish but the impact of the report was obtained on the open.
When you have a report like this, you want to see the market move higher
after the open. That didn't happen which means the market rallied
to the sellers and the buyers were never stronger than the what the
sellers were defensive. In other words, the sellers backed up and
the buyers met them but there was not further movement higher so I would
say the report is in, the market has corrected some of its over sold
condition and now we'll see if the market can rally any further.
It is going to have to show a lot more than it did today to turn me
friendly near term. Long-term, something has to give but it will
be in the next phase of the market what we call the supply -demand phase
at the earliest.
Rice - Rice was lower today but
in slow trade. I am thinking WMP will hold in this range near term
and that premiums will go a little higher. History says not to
sell the first jump in cash prices as there is usually more of a move
higher coming. For now, we wouldn't lock in LDP and we wouldn't be
selling at $1.50 premiums. Something is changing so let's have
some patience and see just what is occurring in the fundamentals.
Natural Gas - A good correction
here but not near the size we are looking for and not a reversal pattern
to hang our hat on. Patience is going to be a must here as well.
Let's see how the market trades early next week. If there is even
a chance for another gulf storm...heaven help us!!!
Thursday September 29th - 2:00 PM -
General Comment - Another slow
day with the market ending mixed. Corn had a min reversal after
hitting the closing range of September corn with a low of $2.02 1/2.
Remember, this is how the market makes accordion lows. Think of an
accordion on its end and then push the upper end down. The spacing
narrows between the peaks of the air chamber as one approached the other
one. That is what is happening in the corn and has occurred over
the past several years. I expect March to fall into the price
range set by December when it's in delivery; however, this is all
subject to change. My guess is won't change much until after the
first of the year as the plight of farmers becomes more central and the
plans for a large reduction in nitrogen consumption crops occurs.
Rice - Cash market continues to
firm up and I wouldn't be short here. I want to see the market
tell me to sell it and even with the large spike in premiums, it could
go higher before turning back down. ARI is reportedly matching the
higher cash bid in Texas which is a 55 cent jump for them in one day.
They are looking for size not small lots. This along with the move
higher in futures and a possible breakout in the making, could signal
another 50 to 75 cent advance. Major resistance in the November is
at $7.90 with minor resistance at $7.40 to $7.45. Things are
changing here with more damage reported out of Arkansas and the delta.
Like I said, I wouldn't be short and I'll let the market tell me when to
sell it.
Natural Gas - Another higher day
here as we approach the time of year when we start drawing down supply
stocks which are are about equal to our 5 year average at just 68 bcf
higher. We actually have less gas now than we did last year at
this time by 15 bcf. Does this support $14.00 gas. No Way!!
Longer term there has to be a correction here but from where. This
has become the old, "last stupid buyer" type market where I can buy it
as long as there is a stupid buyer left who will buy it from me later at
a higher level. Look for the market to have a BIG day down
as it tops. I mean a big top. It may not happen for awhile
but I think this market will top with a big collapse and I for one am
not going to be long and tempting fate. I'll let someone else be
the last stupid buyer.
Rice - Read comments below as
well....We just received today's cash rice sale and it shows cash up 45
cents from a week ago but it is being bid by only one mill. Gulf
Pacific needs some rice and they have pushed prices sharply higher to
$1.50 premium. As of now, ARI is not that high as they are bidding
only 95 cents. This situation will not last very long. If
you want to sell to Gulf, do it quickly as once they get their fill,
they will back out just as fast. They are not the easiest mill to
ship to so some of that $1.50 could be lost in grade and anything else
they can come up with to dock trucks inbound to their mill. Hey,
it's the truth!!
Wednesday September 28th - 2:00 PM -
General Comment - Today may be
considered a type of reversal or at least a short term low in the corn
and beans. My comment is that one day doesn't make for a low in
this type of market condition. Even though corn came back and
closed basically unchanged, today's lows will be viewed as support. While highs can be made simply in a
day, lows are confirmed over time. We'll see if this holds longer
than a few days. In any event, we could see some short covering
out of this as the basis improved a little and that was enough for some
shorts to cover. The question will be, where do commercials start
selling again. My guess is at $2.10 basis December, IF we can
rally that far. Beans can rally another 13 to 20 cents and do
nothing to the current trend.
Rice - Another up day as the
market heads for our major resistance point of $7.40 in November.
More damage being reported and shorts are now feeling the heat. I
still hold that this is a rally to be sold but WHEN??? We have
good buy signals with
PB now up to 69%. $2.00
premiums are being offered using the May futures but that is with full
storage. For now, we are not in the market but can feel things
starting to shift where we (at last) can get a feel for a direction in
the market. Remember, 80% of the time, things are better than what
is being reported in the field. When everyone is saying, "my
neighbor is in trouble", then it's not as bad as everyone is saying.
When they start saying, "I'm in trouble"...then you better
start believing it. We'll see over the next few weeks just how bad
it is.
Natural Gas - Like I said last
night...take out Tuesday's high and you better not be short!!!
That happened today as we exploded higher. I'm looking to sell but
not yet...I'm not even close!!! I'm not saying that because of
price I'm saying that because of risk. There is no way I'm trading
here except in the mini contracts and I'm not even doing that.
Look for a violent top here and we'll wait for a good reason to short
it.
Tuesday September 27th - 6:00 PM -
Hurricane Rita -
Last Thursday we said price improvement from Rita had the best chance in
Cotton. Then it looked like the system was not going to move over
into the Delta. Well, things changed and indeed cotton is the
winner on price improvement. Rice also has seen some strength but
again, be careful in this type of market until the actual damage is
better known.
General Comment - Again new lows
as beans move toward our longer term target of $5.25 which is still 30
cents lower. It may not get that far down but there is no reason
to own corn or beans at all right now as far as the futures goes.
A 50 cent LDP??? Certainly possible for tomorrow. AM I
kicking myself or what. For now, our hope is that we stay in this
level for 30 more days so we can capture the higher rate.
Rice - Market firmed today and
LDP was up 15 cents. I still see the market working a little
higher as damage from Rita is still coming in. When the market
reverses, I'll short it. Hopefully, that will come from 20 to 40
cents higher.
Natural Gas - A hook reversal
DOWN today after yesterday's reversal down. Just as I would expect
from a market that is too hot to touch right now. A short position
should be lifted if the market trades back up through today's high.
That will be major resistance for the market tomorrow. Support is
at 12.85 and then 12.75. I'm out looking for a way in. Right
now I'll sit on my hands and wait a little bit longer.
Monday September 26th - 3:00 PM -
Hurricane Rita -
We came through with no problems. Electricity never went off in
our area for more than 2 minutes. Highest wind was abut 50 to 60
mph. Let's hope we don't have another one this year.
General Comment - New lows in
corn and beans as they continue to sell off. Harvest pressure
should continue for the next few weeks. Corn may trade to $1.95
but I think it will be a buying opportunity if it does. Just
remember, we may see an accordion type of trade the next few months as
the next month falls into the current months trading range. We
need now to pray fro a poor crop in Brazil. They deserve a good
crop failure.
Rice - This rally could last a
little longer as commercial and spec interest in the market technically
has got the market in a short term rally. I think the market has
been stuck between $6.00 and $7.40 and I don't see that changing right
now. Will I sell it against $7.40...you bet if I get the
sell signal timely.
Natural Gas - Massive key
reversal up. Read my comments from last Friday. I said..."Buy
the rumor sell the fact and then buy the damage". That
is what happened today. Look for this rally to fail but it may
take a little time.
Friday September 23rd - 3:00 PM - Next
Update based on abilities after Rita
Hurricane Rita -
Downgraded to Cat 3 as we have been praying for and looks to be hitting
east of us here in Houston. We expect 65 mph sustained with gusts
to 85 mph as I write this. That we can live with maybe even with
out losing electricity. I think odds are about 50-50 on that.
Rice still could be affected as the storm is now expected to stall in
Northeast Texas and Arkansas could get some very heavy rain if this
thing hits inland further east than currently talked about. Cotton
looks to be off the hook for right now.
General Comment - Corn and beans
both ended lower today as harvest pressure surfaced before the weekend.
That may be a regular occurrence the next few weeks. No other
comments here.
Rice - As I said last night we
may see a buy the rumor sell the fact here until the rainfall from Rita
is really known. Watch the radar and if south of I-40 in central
Arkansas becomes a pond, futures could start up a little more.
Natural Gas - Buy the rumor sell
the fact and then buy the damage. That may be what happens in this
one. We are out until Rita is just a bad memory.
Thursday September 22nd - 2:00 PM -
Hurricane Rita -
Should have known. We moved all of our sensitive equipment into
Houston to get away from the direct hit of Rita at our Edna office and
now Houston is expected to get the tougher conditions. High
pressure over Texas is moving the storm to the east but some forecasters
are expecting that high to break down and stop exerting pressure on it
to move eastward. The next 12 hours will be important on it
direction.
We will be staying in Houston to ride it out and I
can tell you I'm one of the few. On our street, there is only 1
other home with anyone in it as Houston is becoming a ghost town.
In regards to the storms track, it looks to be turning more to the east
which will mean we are on the clean side of the storm which is a good
thing.. As I write this Rita is also losing intensity and we are
praying it drops to a CAT 3 before hitting land but in any event, Friday
night into Saturday morning is going to be a LONG night for us in our
home. We expect to lose power and see 100+ mph winds. Your
prayers are certainly requested.
I should be able to update this site again tomorrow
after the close.
General Comment - Corn tried to
go a little higher today but didn't really show a lot of power. We
finished up over 1 cent with beans up over a coupe of cents. Rita
is expect to stall over Oklahoma and Arkansas but if it makes land fall
in far east Texas or Louisiana, it will stall over the eastern part of
Arkansas and that could affect the cotton in the delta. That is
where I'd be looking for a price impact from Rita. Rice could also
be affected but it will take some time for us to know.
Rice - Moving higher on ideas
Rita may cause some problems. This is probably is a buy the rumor
sell the fact.
Natural Gas - Well off their
highs again today but still higher. We are through trading here
until Rita is past us and we can see what damage has been done.
Looks to me the unleaded gas futures may see more push if this storm
steers further east.
Wednesday September 21st - 2:00 PM -
Hurricane Rita - Many of you
know we are sitting in the direct path of Hurricane Rita. Our
offices our in Edna and Houston and as of this writing, it looks like
Edna is in the direct path of this hurricane. Edna is about 40
miles inland so we should see some major damage if it is a direct hit
near Port Lavaca. We will be closing our office Thursday at noon
and will tear down our internet capabilities in the Edna office at that
time. I will try and update this site from Houston late Thursday.
Over the next several days, I will update when able depending on the
situation at our different locations.
General Comment - This is
getting ridiculous. No new news so we need to wait for the market
to get some direction.
Rice - Rice finished higher but
still no real direction. The market may be marking time.
Rita should have no affect on rice prices.
Natural Gas - Well off their
highs today but November hit our $13.50 target and we dumped all calls.
We are through trading here until Rita is past us.
Tuesday September 20th - 5:00 PM -
General Comment - The markets
finished very quiet again today. They remain in a range that has
held them the last 4 days. No reason to trade the markets right
now as we need more news and Rita may give it to us.
Rice - WMP unchanged just like
the market. No comment here.
Natural Gas - Down today but
closer to the high than the low. Rita can have an affect on
production so that will remain the main story here.
Monday September 19th - 2:00 PM -
General Comment - The grain
returned to its quiet ways today with nothing happening. Looks
like Japan is releasing some of its emergency reserves because of slow
export activity down the Mississippi river and it may take months to get
back to normal. Technically, beans can move to $5.20 in the long
term as that remains the gap's target. Corn could test the $2.02
level in December and $1.95 longer term. We should have one bounce
here in the next 6 weeks but it doesn't have to happen.
Here is something to think about...click this link...Hurricane
Rita!!!
Galveston is 45 miles south of Houston which is now
the major grain port along the gulf coast. A hurricane coming into
Houston will close the ports for up to a week assuming its not a Cat 5
hurricane. This will be just another delay for shipping grain and
some customers ,may buy elsewhere while the US rebuilds its export
infrastructure. Not a pretty picture is it.
Rice - Still nothing to talk
about. Cash prices should hold where they are but a hit along the
Houston area by Rita will stop rice shipping by the big mill here in
Texas and slow down any movement to make room in facilities that are
already full of rice.
Natural Gas - Read my
comments from Thursday when I had no idea we could have Rita by today.
As I said this morning, those calls are working pretty darn good now.
This should end by the end of the week but I still expect Nov. to trade
to $13.50. When it does, I'm out of the calls for sure unless we
gap higher through the 13.50 level. That would indicate a major
expansion that could top out over $14.00. I can' believe I'm
typing this!!! $14.00
...It is hard to believe it even when I'm seeing
it!!!
Monday September 19th - 12:00 PM -
General Comment - Grain markets
are quiet this morning and they may stat that way for some time.
This week is going to be hot in the Midwest and plains and harvest is
going to roll along at at quick pace where it is occurring. The
market shows no sign of a low and we are not getting any good news about
river traffic. For now, we remain out of hedges and the LDP locked
in.
Rice - Nothing new here either.
I think we could be stuck in no-man's land until we see what the
Brazilian crop is looking like. That is three months away at best.
Near term we could rally 20 or sell off 20 so we aren't trading it at
all.
Natural Gas - Read my comments
from Thursday when I had no idea we could have Rita by today.
Those calls are working pretty darn good now. This should end by
the end of the week and I still expect Nov. to trade to $13.50
Thursday September 15th - 5:00 PM -
General Comment - Corn and Beans
keep moving lower after Monday's report. Dec corn could trade to
$2.02 easily over the near term and in fact may test the September low
of $1.95 before everything is said and done. We are hearing a lot
of delta farmers say they plan to go into soybeans next year which may
scare some producers in the mid-west to plant more corn in their mix.
Its way too early to talk about next year but it is something to keep in
your mind as you make plans for this fall and winter. Also, we
could see a frost scare at some point but it may be two weeks away and
then again, it may not happen at all.
Rice - Market remains sideways
at best. A rally back to the trend line which was broken a couple
of weeks ago seems unlikely. World market prices are probable
sideways as well with prices over seas holding in a $15 range around the
$295 level. I'm still not interested in trading this one.
Natural Gas - Today's close is
bullish with a possible push now toward $13.00 level. This is a
technical target and it will take something fundamentally to confirm it.
Another storm in the gulf would do it for sure.
Tuesday September 13th - 2:00 PM - No update
Wednesday-
General Comment - Very quiet day
today as the market looks for more news to get an idea of direction.
We may hold here awaiting either news of cold weather or harvest
information that could tilt the market one way or the other. If
you would scroll down to our comments of August 1st, you'll see we have
been pretty well right on the yield be higher than anyone expected.
We forecast 143 and then changed it to 141 when EVERYONE kept saying it
was so bad. With the USDA back up at 143, can it go higher.
History says yes. Bottom line, corn and beans will stay below loan
for a long time so we might as well prepare for it. What I think
is the sleeper is the usage which could go higher than is currently
forecast with one major concern, NOL (New Orleans). We have
already seen the basis start to improve but it may be hard for it to get
back to normal levels soon with the river operating well below normal
levels. My guess remains corn to drift lower, beans to move
sideways to lower and if it gets too cold, a little pop which must be
sold.
Rice - Dead cat bounce
today. WMP was unchanged. I think we could drift even lower
near term with no real bullish news out there and the river problem
continuing.
Natural Gas - Looks like the
market is going to test the break out. We still have a triangle
forming which forecasts a move higher but a close under $11.00 in
November will put that signal in big trouble.
Monday September 12th - 2:00 PM
General Comment - The USDA
reports were bearish but the markets didn't close that bad. In
fact they closed near or on their highs. Wheat actually closed
higher on the day with a hook reversal. With harvest just around
the corner, we enter that time of year when a frost scare could push the
markets higher but with the current USDA numbers, one has to assume any
move higher will be short lived. When the dust settles, there are
some major questions to be answered. The chances for a major rally
into next year are slimmer with these new numbers even with the higher
costs. It's going to be a long winter!!
Rice - Big increase in long grain carryover today.
Maybe we can get a nice break in the WMP as well which might allow an
increase in premium levels. I'm still out and don't want to be
trading it until there is a better situation. We have taken out
the short term up-trend but we need to see what happens as we test
support.
Natural Gas - Profit taking today. The chart
looks like a pennant formation is forming which is bullish 75% of the
time. Its hard to believe but if we sere another storm pop up
anytime soon, the move to $13.50 in November could be confirmed. A
close under $11.00 could indicate a major top. It is an expensive
game for sue.
Monday September 12th - 11:00 AM -
USDA REPORT - BEARISH
General Comment - Let me start
by saying, I wasn't expecting this report to make many changes at all so
I wasn't ready for this morning. The USDA came out with a huge
number on corn so I guess the drought in Illinois is just a figment of
someone's imagination. As I type this corn is down 7 and beans are
down 10 1/2. We will do some more study of the report and have
more comments on it later this afternoon. For now, we do not want
to be putting on hedges again. Here are the facts, at $2.00 diesel
and $10 Natural Gas, planting $2.00 corn doesn't make much sense but
$7.00 rice and 50 cent cotton are both out of the question. You
guys in Iowa get ready, the corn and bean acres can only go higher as
cotton producers and rice farmers who can, will switch to the lower
costs of corn and beans. I'm not going to say it can't get worse
because it can. It is going to be a long winter now for sure.
If you locked in the LDP we did so only for 60 days
and it looks right now that we could very easily not use the LDP we
locked in as the basis will remain weak for another 60 to 90 days based
on news out of New Orleans on the river being used for shipping.
We'll see if that holds true the end of October.
Rice - USDA number added 5
million cwt to the carryover. I don't know if they have the loss
from the hurricane in the numbers but for now it doesn't matter.
The river is such a mess we could see exports drop even further and
increase the carry over. For the Texas rice industry, this is the
kiss of death. Acres should drop dramatically next year based on
what we are hearing. It won't be a lot better in Louisiana if they
have the ground that will support soybeans. Look for drops
everywhere give the cost of energy.
Natural Gas - The market is
lower this morning with nothing out in the Atlantic or Gulf to be
concerned about and things returning to normal along the gulf coast.
If we get another storm, this market is going to be really volatile.
Thursday September 8th - 2:00 PM -
General Comment - The USDA
report Monday and no real progress on getting the river back to normal
put the grains lower today except for wheat. There is nothing we
want to do until after the report on Monday. Remember, a frost
scare usually occurs and the crop is in a position to have some damage.
Not that we think it will happen because the odds stand at about 8% but
even so some premium is possible once the report is on the record.
Rice - No change here in our
thoughts. There is both bullish and bearish news out there but the
fact we can't ship rice is bad enough for now. We are not trading
it and holding our cash rice for now.
Natural Gas - Massive Key
Reversal UP today may indicate we will test the highs again. The
gap in November has us forecasting a move to 13.50. If we get
another gulf storm, things are going to get very hot in this market.
Wednesday September 7th - 2:00 PM -
General Comment - Basis is
starting to improve but the demand for corn to be shipped is still
non-existent. Nearby we see the basis staying where it is give or
take a nickel but longer term, we see the basis getting better.
You should have LDP'd all of your grain by now. If not, wait until
tomorrow and see if the LDP isn't up 3 to 4 cents from today. The
market is stating to trend a little sideways but its at the low end so
any demand could give us a good kick higher for a few weeks.
Rice - Still nothing to comment
on here. We are down hard today but again this market is being led
around by the big boys right now and we won't play with them until
things settle down.
Natural Gas - The tropical storm
has been discounted by most of the trade as being a non-event.
They may be wrong about that as we watch Ophelia spin off the Florida
coast going no-where. A move to the west is being forecast by some
who feel a ridge is going to form in the next two days just to the north
of the storm and that will steer it west. I don't know but things
are just too uncertain to be short at this price.
Tuesday September 6th -10:00 PM -
General Comment - Markets
rallied today and basis levels improved as talk that the river is about
to re-open brought in some buying. I still see a rally near term
and want to sell the market higher. Near term things will be back
and forth as we await news from NOL.
Rice - Still nothing to comment
on here either. WMP was unchanged.
Natural Gas - The storm off the
Florida coast may cross over into the gulf and head west according to
some forecasters. If that happens, this market could shoot sharply
higher. It will take only one more gulf storm to reek havoc on gas
prices once again. Nerves are stretched about as far as they can
go. We would trade very carefully here. Calls may be
interesting if this storm heads west.
Monday September 5th -10:00 PM -
General Comment - Markets have
opened a little higher tonight as more talk of south bound barge traffic
is being discussed. The re-opening of shipping facilities will
bring a change to the basis which is very low right now. We should
get more news this week as to when shipping can re-start along that part
of the Gulf Coast. Also, look for crude and natural gas to get
bearish news early this week. We have lifted all hedges and have
LDP's corn and milo. If you haven't, we would do so this week.
Thursday September 1st -10:00 PM
- Next Update Sunday Night...I mean Monday Night
General Comment - The corn
bounce we have been expected started today with a nice 6 cent pop.
Basis remains in the pits but there are signs of some of the port
facilities in New Orleans opening back up. We need more news on
which ones and when barges can travel down river. Things may seem
at a standstill in some places but I have a feeling they are working
over time on getting the rive activity back as fast as they can.
Same thing with beans. We'll see if there is any follow through
tomorrow. December corn could rally back to $2.30 on this bounce.
Rice - We are still in the
gradual up trending channel. The river situation is extremely
important for rice. Also, we are hearing of wide spread damage to
the rice crops in Mississippi and Arkansas. We are out of the
market looking for direction and we may be out for some time.
Natural Gas - No follow through
to the downside is bad news for the bears here. Tomorrow will be
important as we need to work through the current loss of gas production
and transfer. My sources continue to say things aren't as bad as
they seem but there is no major selling by those who know either so we
may sit here or a little higher the next few days. Then again, a
move back under $11.00 would signal an attempt to close the gap down to
around $10.00 in October Natural Gas. Hard one to call so we'll
stay where we are and that's long a November put spread. We may
roll it higher in the next few days.
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