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Middle Tennessee | Kansas City wheat is at the moment ridiculously valued. Sure, ADM in Salinas Kansas is bidding 20 cents below the May contract, and they put out 80 lots last night. Forever, I’d wondered about the relationship between the board and the cash markets, and the role of deliveries. Today in the shower I realized, when commercials deliver, they are buying the board. Probably sold closer to seven dollars than five, and now, they’ve got the goods, and are buying the board.
We have a weekly reversal off contract lows. What is the point in studying these markets, and risk v reward, without taking note of that? Then there’s the weather: The drought in the Southern High Plains is extending and deepening. About half the Plains have snow cover tonight, which is all gonna melt by the weekend. After that, there will be more temperatures near zero. And then, almost no more rain for weeks!
Finally, to end this last week, open interest is increasing in the KC market. At the moment, the hedge funds are as short as they have ever been in the KC market, and commercial buyers are as long as they have every been. I think those commercial buyers will mind their line, and demand a few dimes at least. They might give up nickels, but they will demand dimes. | |
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Weekly Reversal Off Contract Lows
