Financial Worries Now Dominate

Published on: 15:23PM Jun 05, 2010

Financial Worries Now Dominate

 Look at the charts below. You will see that as long as the economy is running on a more or less even keel, grain and bean prices respond to the things that they should: weather, amount in storage and usage. But the past days, fear that the US economy is not out of the woods (which it is not) have combined with continuing awareness of SPIG or GIPS, if you prefer, meaning Spain, Portugal, Greece and Italy, economic weakness that contains the seeds of disaster, has dominated all else. The charts show Wheat, Corn, Beans and the Dow Jones.

Corn (top) and Dow (bottom)

Wheat and Dow

Beans and Dow

Meanwhile, on the Commitment of Traders side of things, not much has changed.

Wheat: Prices down 22¢, more bets placed, commercials about as long as last week, trend following funds about as short as last week  and Index Funds a little longer.

Little change. Commercials are close to neutral, fundies are long, index funds are solidly long but prices were down 20¢ basis December.
Beans November beans down only 8¢ with no appreciable change in the positions of commercials, fundies or index funds. I’m still awaiting upward motion to buy for a swing trade.