If its not headlines about port-worker strikes in South America (first in Argentina, now possibly Brazil), then its rumblings about China's government cracking down on the "financing game" being played by Chinese importers. Normally I would be telling you this Chinese rhetoric should prompt some additional cancellations, but this time around there were rumors circulating that the "letter of credits" are getting called in early, forcing some in China to price and take delivery of beans much sooner then anticipated. Lets also not forget the rumors that some big Chinese hedgers were supposedly caught short Maybe this is all over hyped nonsense...maybe not???

Regardless the market is extremely nervous as seen by yesterdays $0.59 cent range in the JUL13 soybean market. Some analyst believe it could be the "blow-off-top" technicians have been waiting for. If this is true and traders playing the bull-spreads start to get spooked by the recent price action, heavy liquidation could cause the new-crop to rally even higher, possibly even testing the major resistance I keep talking about up around $12.60 in the NOV13 contract. With this in mind, producers who need to make catch-up sales in new-crop beans should be thinking about pulling the trigger on another round just north of $12.55.  

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Corn bulls were very excited to hear reports that 540,000 metric tons of US corn had been sold to the Chinese and an "unknown." I am not certain, but this has to be one of the top-15 largest single day corn sales ever announced by the USDA. On the heels of yesterday's rally and the strong basis across most of the US I decided it was time to "SELL OUT" of all old-crop corn.  Yes, I may end up being a little early and miss some of the remaining flat-price appreciation, but with most processors being forced to pay between $7.00 and $7.50 a bushel I am worried that the basis could start to eroded and never come back. I believe at best you have a 30-day window for this type of basis: Central MO +$0.95 over, NW IA +$0.59 over, Cedar Rapids IA +$0.70 over, Linden IN +$0.67 over, Decatur IL +$0.60 over, etc...

Q. Kevin, only a few marketing days ago your headline read "HOLD OLD CROP CORN"... what changed???

A. Made that comment on Wed May 15th. We had just rallied $0.30 cents on Monday and at that time the market was testing the $6.60 level... actually looked like we could push through it. Then all of a sudden by this Tuesday we are $0.30 cents lower and testing $6.30.  The market seems extremely "uncertain" right now, in return this is making me "uncertain." I have found the best thing to do when you are uncertain about overall short-term market direction is to simply move out of the way. When an animal isn't responding like you think it should, it could quickly become dangerous. Right now, I am not really liking the way this market is reacting and I believe the safest place to watch it play out is from the shore. From my perspective, bank the $7.00 plus corn profits and let someone else try and tame this wild ride.

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Argentina's multi-day wage strike by port-workers has now delayed countless cargo ships coming in and out of the country. Keep in mind Argentina is worlds #1 supplier of both soybean oil and meal. Supposedly more negotiations will take place today that are aimed at ending the work stoppage. Who knows if and for how long they will be able to come to an agreement. Remember, double digit inflation is ripping through their country and workers are continually demanding higher wages in order to keep up with the rising cost of living. From what is being reported at least 50 ships are stalled in the greater Rosario area with another 50 affected on the high-seas. Bottom-line, with the world begging for more soy, any signs of delay is prompting more bullish optimism.

Even crazier is the fact that Argentine's President Cristina Fernandez de Kirchner, in an attempt to try and calm down the public rage over inflation, made promises yesterday in a speech to boost social spending by 70% annually. Now how in the world will that solve the problem?  The only way the government can get their hands on more money to give to the poor is to increase "taxes" on those working.  Makes you wonder if the port-workers will every end up being satisfied?

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Corn technicians are closely watching the $5.11 support area, which held in place after early threats yesterday. I suspect the trade will take a couple of runs at the barrier before ultimately deciding on its true direction. From my perspective, with old-crop tightness, we may actually get stuck in a range between $4.90 and $5.50 until the end of June USDA Stocks Report. As for old-crop, I suspect prices will have a hard time sustaining any momentum over $6.60. From a producers perspective, if your still holding old-crop bushels, and the basis remains strong in your area, you have to look to sell more bushels on rallies beyond this level. Regardless of how tight cash supplies are, if spec's continue to unwind bull-spreads on the board it will be tough for old-crop flat prices to gain much upside traction. As we have learned the last several years, swimming upstream against "money-flow" is never any easy feat. 

Even though we made huge leaps in planting progress this past week, recent rainfall events may keep many planters sidelined for the next several days. With preventive plant dates quickly approaching many producers may be forced to make a tough decision about those final few acres. 

Example: Kevin, a little update on things in north-central North Dakota. It has been raining for two days straight now, many areas have received up to 5 inches of rain. It looks as if it will be a week or more till we can get back in the fields, and thats with good sun and strong winds. Friday is the end plant date for canola and corn. Seems as if we will be planting well into June or else electing to go with "prevent plant." Just wanted to keep everyone updated. 

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 Soybean technicians are keeping a close eye on the July contract as it approaches the $15.00 level, an area we have not been able to breach since late last summer. I suspect if the stars align and we get the "technical bulls" on the bandwagon with a breakout to the upside, along with "fundamental bulls" on the bandwagon as balance sheets look almost impossible to solve, we might just have ourselves a runaway train to higher ground in old-crop soy. This is obviously good news for producers holding old-crop bushels, and also good news for producers who are behind on their new-crop sales, as tightness in old-crop artificially keeps new-crop prices elevated.

With very limited soy supplies here in the US, the trade may continue to be apprehensive in breaking new-crop prices, at least until the upcoming crop looks more like a "sure thing." I am sure many bears will continue to talk about $9.50 soybeans, just remember $11.50 soybeans will have to happen first, and that's a number we haven't seen since this time last year. From a technical perspective I am looking for NOV13 beans to remain in a near-term range from $11.80 to $12.50. Producers holding old-crop bushels need to be paying close attention to the basis, I am hearing it is breaking in several locations as many processors are rolling bids out to August. UN officials saying the H7N9 bird-flu virus in China appears to have been brought under control, primarily due to restrictions at bird markets. Initial estimates show the virus to this point has cost the Chinese economy some $6.5 billion in losses. If you’re a bear speculating in this market, my best advice is, "don't get caught out over the tips of your skis." There could eventually be a big run to the downside, the last thing you want to do is break a leg early and miss the best part of the slope.   

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