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Middle Tennessee | Lets get it! Markwright, I'm attaching the weight of below to your thread, hope I don't sink it,
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There were more questions than answers offered in this week’s developments. Sorry for the cop out, but there was after all a major USDA release. When USDA said the weather was going to hit yield, even a mere 2% from optimistic prior projections, Goldman Sachs and Deutsche Bank (according to agrimoney, ) issued communiques, dissenting over the average weight of a corn cob. On the afternoon of the report, some weak shorts bailed or some weak longs jumped in, then on Tuesday the strong shorts returned to the scene with a knife, stabbed the bulls in the kidney a couple times, and on Wednesday disappeared around the corner, leaving bloody bodies and vague descriptions of the assailing bear. Seventy two hours and a half-million traded contracts later, we’ve got a key-reversal on the daily chart, a subsequent negation of that, and no price change.
There’s not a lot of agreement on impact of current forecasts, cool and dry. Maybe the crops will remain in suspended adolescence only to die on a frozen late summer’s eve, or maybe not. Certainly, the Big Bear Thesis in in strong question. Soybeans are nearing records in their advance over corn, as anxiety over acreage and a late crop is finding better expression in the bean markets. Sales of the new crop soybeans are erupting from the Earth with the beans themselves, like USDA said they would. This fact is to the heart of the Big Picture bears want people to see, that sustained high prices would crank global production and overcompensate price. It hasn’t yet happened in soybeans, and the soybean long-term charts I think are still viable. All this after the record South American crop last spring that everyone warned us about. Evidently, satisfying the world’s demand for beans and meal has not yet proven an easy job even for the multitude of great farmers around the world.
Unfortunately for buyers of corn and wheat, it looks like hedge funds may be looking to leverage their enormous shorts in those markets with bean spreads. Cash corn prices and basis are volatile, there’s a legitimate cash bull on my favorite chat board, and he’s showing no weakness. Industrial buyers are talking about possibilities of maintenance shutdowns for industrial plants if coverage gaps can’t be filled. But when you can bank a RIN at a buck, and crude oil is in outright bull mode, I imagine production pauses would have big costs.
Finally, the nightmare in Egypt is deepening, which is not good for international grain shippers, but it is good for crude oil. (Side note, US policy in Egypt is an ongoing major disaster, and John Kerry sucks, there’s a risk of Iran-US type relations, how long has that been going on now, 40 years?) | |
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With China, Japan, and S. Korea
