With these very volatile markets don’t forget to have your open orders or offers in place. One also needs to continue to watch out for a changing of the fundamental picture but until we see some sort of confirmation that it is heading in that direction the trend of least resistance appears to be up; just keep in mind where the menality/thoughts of the market was at other extreme times. Such as in 08 when crude approached $150, corn $8.00, and Spring wheat over 20.00; even this last year in June when cash prices where under $3.00 for corn and wheat hardly even $4.00
Extreme bull markets eventually because of how economics 101 works should turn into extreme bear markets at some point and usually when everyone least expects it. The price action the past couple days should remind us of that.
One thing that I have seen lately that happened the last time when grains peaked was some analysts that issue targets or sell signals for various reasons have't called with the signal as they feel we could continue to run higher. So even though there technical system is saying sell; they are not pulling the trigger. Last time I remember that happened on a regular basis was when corn hit around $8.00..........
Markets where called weaker this a.m. behind a weaker overnight session, weaker outside markets, and a general sell off in commodities in general.
In the overnight session corn was down 6 on old crop while new crop corn was near unchanged, beans where down about 8, and wheat was off 3-6 cents in most of the contracts. Outside markets where under pressure as crude was off over 2.00 a barrel when the grains opened, equities where weaker, and the Dollar was stronger. Silver, gold, and most commodities in general are weaker this a.m. as we appeared to be in store for a correction or at least some profit taking.
When the market opened we opened even lower then where the overnights left off at and it appeared we could be in for an ugly day. Most of the talk however remains that of a corrective nature talk as overall most remain positive towards price as we go forward; but with the huge amount of length and rather high historical prices as well as setiment in the market place many are a little cautious in thinking as we have slowly started to see some potential fundamental changes. As example ethanol margins are not being reported in the red; China potentially buying feed wheat instead of corn, moisture hitting parts of HRW country, and weather in parts of South America appears to have turned.
Now around 12:45 we have seen some major changes in the market place; as we now have corn up 7 nearly a quarter off of it’s lows, beans still remain in the red down 4, but they are 20 plus off of their lows, and wheat has MPLS up 8-9, CBOT up 4-5, and KC up 7 all of which are 20 cents plus off of the lows. So perhaps the correction talk was right and we are seeing a correction that is rather short lived????
I guess it will be interesting to see how we are able to close out the day. Will we see further liquidating from the weakness yesterday and earlier in the session or will demand and the bulls pull us back up once again?
Basis remains hit and miss depending on freight and protein levels. Also the birdseed market appears to be a little more hit and miss then it has the past several days; as it is simply a struggle to find firm bids; I would and should mention that it isn’t exactly easy to buy sunflowers and other birdseed commodities either; so perhaps days when we lack interest from either the buyers or sellers are days when the bid-ask spread just gets a little wider.
For those of you watching the http://www.grainmarketingplans.blogspot.com/ and the rather weird marketing ideas that a couple characters have out there has been some updates in the past couple of days and per marketing plan there will be some more over the next few days.
The markets have now closed and it looks like the bulls or demand won out over the bears today as the grains closed well off of the lows and it doesn’t appear to be because of the outside markets as crude is still down 2.00 or so a barrel and the dollar is still on the weak side of things. The closes in the grains look like they will be up 9-11 cents in MPLS, up 8-9 in KC wheat, CBOT wheat was up 3-6 cents, beans where 3-6 stronger, old crop corn was up 13, and NC corn was up 8.
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