i was in July's and though i missed some of that pop up near 8. I sold in mid 7's.
Just nibbled on DEC. Maybe I'm early, but we will see....it's not like it's silver leverage. :)
was really early yesterday. Nasty.
Outside markets overwhelming corn market fundamentals. IMO will take weather to get Dec corn back up. July corn could do anything because of tight stocks issue but I can't play in that game now. Its a market unto its own. Users will still need to find corn in August. But even if July rallies, it may not affect Dec much.
Looks like we closed the March gap in July and Dec down into support at 6.20. So where do we think the shorts in the market start to cover? Instead of buying the dips, should we change strategy and start selling the rallies?
Corn is suddenly up 20 cents. Makes the contracts I got this morning green.
Art: I just wanted to thank you for all your input in this area. Your expertise is very much appreciated!
Turd: And I appreciate your commentary as well. I wish I had more time to post. Not able to get on here during the day as much as I would like to.
Should have nibbled at those beans at 13.00. That was a quick spike down. Looks like we could get a bounce but I can't see a bullish story like corn. Farmers may start being sellers at some point.
I had orders in today to buy Dec corn 6.15 and 6.05 and missed getting back in. (6.20 low) Time to be cautious going into the June 30 acre report. Not sure how accurate the USDA report will be with unplanted acres, flood losses, or switches to beans. Read today there may be 5 mil acres unplanted in ND due to wet or flooded conditions.
Getting a nice rally in beans and corn tonight. I'm tempted to get back in corn tonight.
Goodnight and goodluck.
Koreans buying more. South Africa stocks down 28% from year before. Floods starting to get some attention outside the Midwest (i.e., even hedge fund traders may hear about it). July contract leading complex up.
Should be an interesting day, but I'll be out today until this afternoon. Totally missed yesterday as well, but just as well as the oil release would have blown my stents!
GLTA and thanks for all the commentary and observations.
Ever notice that the future price of Corn follows the price Oil and does not necessarily trade on its own Supply and Demand merits? That said, Corn could be weak for awhile as US election cycles are 1.25 year away. Obama has already started releasing Oil from the US Strategic Oil Reserve in hopes of suppressing Oil prices. Such release could go on for a long time under the guise that we need to make up for lost Lybian Oil.
Interesting to watch virtually all the commodity prices go down last week whether it be Gold, Silver, Oil or Corn. The FED announced that QE2 will be winding down with the exception of maturing bonds which will be "reinvested" in new debt issues. I was watching interest rates closely this past week because the added Demand from FED purchases of US bonds thru QE1 and QE2 has no doubt left interest rates artificially lower than they should be, especially on the long end the yield curve which have been especially targeted to keep housing mortgage rates lows. I thought that perhaps it was finally time short US Treasuries with the announced end of QE2. Well, interest rates barely moved at all over the past couple of days. On Thursday rates in fact went down quite a bit and went marginally back up on Friday.
All these matters are related to one another.
Traders are unwilling to short Treasuries because they know the markets are artificial. Even though the FED announced the end of QE2, they equally know that there are a few weeks of QE2 purchases left which represents more massive amounts of artificial demand for Treasuries until QE2 is completely over. And, even when QE2 is completely over, do you want to be the trader who shorted Treasuries only to find out that the FED or other CB's are working together to continue to suppress interest rates in some other manner or directly by stealth? I believe that is what Mr. Market is saying. These are not true markets and may not be for the foreseeable future.
Likewise, just by chance, when the end of QE2 is announced, there is another announcement that the Strategic Oil Reserve is be opened up to suppress Oil prices. Go figure. We know that Oil is followed by many commodities, including our beloved Corn and Silver. It is the grease of the economy. Smart move by the EE.
Trader Dan wrote this blog message about deflation:
I think I see what Ferd is talking about when he refers to the Summer doldrums in PM's. Except they are not the typical Summer doldrums created by a lack of Demand. There very well may be a period of lower commodity prices for awhile. The CB's of the world need cover to do further QE's to support uncontrollable spending and budgets that desperately need to be parred back, but the politicians lack the intestinal fortitude to do so for the sake of election cycles. So, the powers that be will undoubted use whatever tools are at their disposal to continue to suppress commodity prices as they know QE3 is in fact inevitable and need cover to do so. This includes releases from the Strategic Oil Reserve and using their seemingly unlimited amount of fiat money to upset the normal supply and demand cycles of commodities. I am liberally including fiat money as a commodity in this sense as the price of money - interest - will continue to be suppressed as well.
The US is broke. No doubt about it. In that sense there should be deflation in terms of US assets due to a lack of Demand. One would expect that that value of housing and the US stock market will ebb lower as people lack the money to purchase these domestic items. However, commodities are a different asset class. They have a world-wide market, not subject to just broke US citizens for demand. As the population of the world continues to increase and developing countries such as Brazil, China and India continue to use greater amounts of these resources, the prices of commodities have to go higher in the long run no matter what tools the EE has its disposal. One only has to look at the long-term trend line of virtually every commodity to understand that the power of EE is temporal against the greater global laws of Supply and Demand.
After all the talk about late corn planting that we've had lately, I just wanted to chime in with what I'm seeing on the ground here in Southern Wisconsin. After such a late start, I have to say the corn around here looks terrific right now. Seems to be all caught up.
Just a small sample, amateur visual observation, but I thought I'd just throw it out there.
The American farmer did a great job getting this crop planted. Glad to hear your area looking good. Growing conditions have been mostly good. Once those corn roots get to the fertilizer, it takes off. Would like to hear a comment from someone in the Indiana or Ohio area. They have a late crop. Will be interesting to see if USDA reduces corn yield in the report Thursday. Market will be focused on crop report, and then after that will be trading weather.
With food inflation a major concern, don't be surprised if our government attempts some market manipulation with this USDA report, similar to the silver and crude markets. Stay tuned.
I had a nice run on grains last year
But lost around half my profits going
Long again in spring. Have been flat
Since then. Watching closely again
Now because we are close to being
Extremely oversold here. I listen to
Agweb radio at www.agweb.com And especially to Gerry. Gulke who
Seems very knowledgeable, along
With Bob Utterbeck who I also quite
Like. Agree that we're in a wait and See period right now though.
the late crops are looking remarkably well. We've got a good base built, but here, and in other tougher soil areas, we are always just 10 days from a drought.
Really don't think supply and demand factors are playing much of a role in these markets. The EE is certainly manipulating just like oil, silver, etc.
Like I said in an earlier post, I think it's prudent to stand aside until things settle down a bit, or the FED policy becomes more clear.
Looks like there's going to be some excitement this week.
Corn trade is 8 to 12 higher at midday due to short covering. The CEO of
Cargill revealed in an interview this morning that the company has estimated
acreage loss, due to flooding concerns along the Missouri River, at 2.5 million
acres. This is still an average estimate within the range of projected losses,
but it has contributed to the strength at midday. The USDA confirmed a 230,000
ton sale of U.S. corn yesterday to unknown locations. This lends some
credibility to rumors last week that suggested a large sale to China. If
confirmed to be of Chinese origin, then the trade should find some renewed
buying interest. Position-squaring ahead of Thursday's Quarterly Grain Stocks
Report could provide active trade this week. The average trade guess for
planted corn acreage is at 90.76 million with a range of 89.5 ma to 91.5 ma.
The average stocks estimate is 3.302 billion bushels with a range of 2.99 bb to
Flooding is an issue that's really not truly factored in right now. Corn really has a fundamental issue of supply problems in the pipeline which "at some point" is going to really jolt the market.
The deflationary trade in all commodities is already wearing thin ---- so we'll see what happens in direct relation to corn before long.
I live in the Missouri River valley area a bit NW of Sioux City. We are getting clobbered with on-going flooding. I make an approximate 25 mile commute to work each day and can see standing water in fields that are not even close to river/streams. Mostly along terraces or low lying areas.
I have some bank customers who farm in the actual Missouri River valley between Sioux City and Omaha. That soil will not produce very well this year due to soil type. The whole region is extremely silty (soil is almost like powder) and does not drain due to its flatness. Just no where for the water to go. For that reason, most of the ground in that area sells for less than 1/2 of what other soil outside of the Missouri River Valley sells for at auction. Problem is, in a good season that ground is capable of producing 200 BU/Acre corn while this season much of it may be next to nothing. On the Iowa side of the river the land covers an average of approximately 20 mile wide all the way from Sioux City to the Iowa/Missouri border. Additionally, levies have been breached in Southern Iowa inundating a lot of acres with actual river water. Here is an example of what some of it looks like:
The storms have been extremely intense as well. My wife and I had a small twister that leveled a barn on our acreage that must have passed within 75 feet of our house based on large trees and branches (2 feet in diameter) that were just snapped off. Radar screens with shades of orange, red and purple seem all too common this year. There was another larger twister than ran for 8 miles just 2.5 miles to our west. Lots of hail damage and flattened crops.
Thanks for the update on your area. Like Tally said, flooding is an issue not factored in. I have read that 6.3 million acres in ND will be unplanted, most of this wheat, and total acres in the northern plains and Canada could be 12 million. The wheat market may wake up now. Lots of corn acres being lost along the Missouri River in other states. I wonder if this will be accounted for in the crop report Thursday. This report is the most important report of the year and if you have positions in the grain market, be aware of your risk or reduce size of positions. USDA has been known to throw the market some curves in past years. December corn has tested the 6.20 level twice now, apparently users finding value at that level. Yesterdays conditions report and talk of flood damage to crop acres has rallied the markets. Based on the fundamentals, I have a bullish bias toward the markets, and wheat could now be the surprise market. Crop report comes out 7:30AM Thursday.... GLTA
Not a bad overnight and day for July Corn [flat now], though corn fell back after Goldman report came out saying beans probably have fewer acres due to more corn and cotton planting. Went long Sept Corn for overnight and tomorrow's report, just to be contrary.
I sold the last of my corn from last Friday into this morning's strength and now am all out. I believe that if there is any weakness on thursday's report one should buy grain. The reality on the ground is simply not good.
Haven't lost money on a corn trade all year. I should probably quit this silver stuff!!
Art - Thanks. Please keep up the great posts.
I will be vacationing the next 10 days or so.