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And so, another WASDE

Published on: 13:54PM Jul 12, 2011

 

Asia and Europe spent the night selling the grains. The lows were around 5AM CDT, and were more than 20¢ below yesterday's Chicago close. This morning saw opening prices that were above most of the night action, and it was a "You can pay me now, or you can pay me later" sort of  day. There were NO chances to get out even in corn, those that shorted wheat at the beginning of the night session had adequate opportunity to escape, and sellers of beans during the first night hour had lots of opportunity to break even.

Where does that leave us technically? For wheat, this looks to be the first nail in the bear's coffin, but expect some more downside action (not necessarily new lows) before things get going. Nothing changed for beans: loosely speaking, beans are still range-trading between $13 and $14, more or less. Over the last seven sessions, corn has gone a long way towards getting back into a bull market.

To be clear, while my expectations for the end of the year are bullish, I'm not long any grains at the moment, and don't expect to be for a while yet. And, my expectations may not be where the market goes. If the market goes down, I'll trade from the short side (& report here that I think the market is going down).

As a bit of a footnote, the US Dollar has been showing strength as of late. Today saw the dollar go down, giving up its overnight gains, a couple of hours before the grain pits opened.  I don't think that was much of a driving factor, if at all, in today's grain pricing, but a weaker dollar cannot hurt exports.