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CoT & Price-Action

Published on: 07:36AM Dec 04, 2010

Wheat had the most fun this week: up 90¢. If that wasn’t surprising enough, how about the fact that the funds and farmers are carrying the shorts while the commercials are carrying the longs? In days gone bye, that would certainly have indicated a bull market in the making. In the modern world, the funds have as much buying power than Cargill, ADM, ConAgra and the rest combined, so they can push prices around a bit. What has tended to happen with this sort of configuration has been a couple of week rally in an otherwise bearish market.

Beans and corn saw slight expansion of the funds longs and commercial shorts. The CoT has been following price changes, not leading for some years now.

Oats is the sole arena in which commercials maintain pricing, hence predictive power. The commercials are covering their shorts which indicates prices are likely to fall.

 

On a price-action basis, corn and beans have a bit further up to go to hit their theoretical targets. Since wheat seems to be the driving force, expect it to go up at least a bit this week. Oats are in the doldrums.