Jumping Wheat

Published on: 03:19AM Jul 31, 2010

Two weeks ago, December wheat ended the week at 616 and I “proclaimed” 640 was as good as in hand, with a technical projection to 679-ish. Wish I could say I am so smart I knew prices were going to jump instantly. As everyone knows, we finished the week with December at 693. Consider selling part of your crop now if 693 will get the job done for you. There is no more bad news to come from Russia or China and this isn’t exactly growing season in Argentina. What I find worrisome is this week saw a lot of action on a lot of volume, BUT (there always is) the commercials are still long which should keep further price increases in play. If next week is like this one was (& I expect it will be different), prices will get to 760 or higher. If that happens in the next couple of weeks, for goodness sakes, sell futures for most of your crop.

Corn hasn’t managed 416 yet – still has a dime to go. I see no reason why it should stop here, although you never know for sure until the crops are in. Commercials, funds and small specs are pretty much where they were a week ago. Weather is out of the news in the sense of not being headlines in the media. Unless things are a lot better in the fields than I think, there is room to pass 416 (basis December) before harvest.

Beans are at 1005. That leaves 45¢ to fetch, if my expected minimum prices are to be reached. Funds actually reduced their longs on an up week, while commercials were buying. We are a bit early to proclaim a top, and there is little evidence of a top in the charts. Still, I don’t much like it when funds are not increasing their longs.

Oats actually managed a rally week. If we see a weekly close above 285, we will actually have a shot at 325. I don’t really believe that, but that is what the charts say, & I have found that I’m not smart enough to ignore them.

It would not be unusual or surprising to see prices top in August. Plan to cover your… donkey?  Better to be prepared for a fast exit than to be complacent and have a crummy winter because prices suddenly dropped 15% when you weren’t quite ready for it. 15% in less than a week has happened in the past and might happen this year. Be ready.