Time for Financials to Allow Grains to Rise?

Published on: 02:25AM Jun 13, 2010
 Financials: The CRB Index had its best week since November. Sadly, that was mostly from crude rather than from really good weeks in grains. Bonds had an uncertain but somewhat bullish week while the Dow had a generally positive week. So, how did the grains and beans fare?

 

Oats had a strong weeks posting the highest close since March 19, basis September. Commercials and small specs are long and it looks like fundies are about to get trimmed by having stayed too long at the fair.

 

Beans are up only 9¢ basis December with both funds and commercials expecting higher prices.

 

Wheat was barely up for the week with funds getting a little less short and commercials a little less long.

 

Corn was up a solid 10½¢ basis December and commercials got a little longer while funds got a little less long. Small specs continue to be the group whose net shorts balance the others longs.

 

What to expect? I expect, but don’t promise, the awaited bull move. That’s a “sooner rather than later” expectation, not a “load up long now” statement. Crude oil players are anticipating firming economic conditions world wide. Stock gurus, and more important, stock buyers, want to believe crude, but aren’t sure yet. The bond market shows no sign of raining on anybody’s parade. All of those things are bullish for grains. And last, but not least, oats think a rally might be a good idea, and oats, folks like to believe, lead the pack.