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| The commitment of traders is interesting in regard to wheat and corn: the large trader in wheat covered the majority of their short old crop wheat and remains long new crop wheat. The commercials have increased their longs in old crop wheat and remain short new crop wheat. The small trader has increased short positions in both. The large trader is net long both old and new crop corn, the commercial remains long old crop and short new crop with not much change. The small trader increased shorts in both old and new crop corn.
Not much of interest in the soybeans. Large traders remain long, commercials and small traders remain short.
Many of these funds are heavily capitalized & are very diverse; when a decision is made to pull the trigger on a position, I am told they could care less about price, fills & etc…they just exit. The same when they decide to enter. I note a key moving average is only about a dime above the current close on March wheat; whether this will trigger some buying, when and if crossed, I don’t know. The same moving average is about 15 cents below the close of January beans, if crossed on the downside, could trigger some selling, maybe.
In the old days, the commercials would determine daily the net long or short then decide whether to sell or buy futures or remain open. There are a few more players now & in this age of modern inventory & lending methods, hedges may be placed according to different criteria.
Again in times past, in regard to export trades, if someone was suspected to be snooping around for grain, an advance long position could be taken & simply pitch it if the business did not materialize; however, in view of the volatility of these markets today, that could be an expensive proposition. In normal times, it would be expected the commercial to be short futures, exchanging futures for cash as the grain is priced.
Point is, in a historic market, you never know who is lurking in the shadows. In the times of which I am familiar & the GURU of whom I met a few times, corn hedges may have been placed in wheat, or vice-versa or a long net export corn position may be been offset with a net short position in wheat or soybeans. This particular guru never kept notes, spent most of his time in the back seat of a stretch limo on the phone or in a private jet; this is before the Iron Curtain disappeared & this person had world contacts which governments did not possess; he was a frequent source for info by the various US intelligence agencies. Keeping in mind, if a country was thinking about a little conflict somewhere, one of their first concerns was food. He was a man of no words (compared to someone described as ‘few words’) & I always wondered why he even appeared at any gathering except to perhaps see some regular people in a well-lit room versus meetings in darkness. He was legendary & when right generated spectacular returns…when wrong…markets moved worldwide amidst flames.
Therefore, I view any short position in old crop wheat as high risk. The old crop wheat market could leave the scene quietly…it could be otherwise & just out of curiosity I have to own just a tiny bit of it.
As I view new crop wheat, it has broken out to the upside; corn is approaching an area of heavy resistance and may struggle for awhile.
The trip to this new car wash yesterday was a disappointment for me. Glad the wheat closed higher, I needed a boost. It was all my fault. The young manager viewed me as an old buzzard who might fall into the machinery particularly if I was depressed over my potential desperate financial condition. I appeared too anxious at the outset & know I came across as a little mentally unstable. But, he is not a trader.
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Ramblings
