Published on: 19:25PM May 14, 2010
Wheat: The record carry-over in wheat caught the market by surprise and trading sent wheat prices down 23¢ Monday. Tuesday and Wednesday saw the bulls try to turn the market, but the bears stormed back to take control of the market. It appears 460 basis July is a done deal. Meanwhile, the commercials increased their longs slightly and fund managers increased their shorts. Will the bears manage 440 before the bulls come back into the market.
Beans: Last week’s action was not friendly for the bears, though not definitive. Commercials, whom I suggested were/are swing trading beans, have now moved from net short to net long. The daily charts do not look friendly for bulls here, however, and a drop to 940 or even 930 seems likely.
Corn, on the other hand, was perfectly happy until export numbers came in. Or was that the continued sharp decline in the Euro? Both commercials and funds are long corn, making a sharp decline seem unlikely. Over the past six weeks, commercials and funds have swapped positions in terms of which is the larger holder of longs and by how much. At this moment, 350-355 seems like the ledge that bulls will defend. I think that hedging your crop is not going to be an issue until 425. Then it will become “here or look for another 50¢?” There is no reason to make that call now, so just hope your crop is great and the rest of the world is less good.