CoT & Price Action Update with crude

Published on: 15:55PM Apr 16, 2011

December corn looks bullish with a target of 673. For the second consecutive week, funds bought good chunks and commercials happily sold to them. July corn has not faired as well since the Tuesday sell off. In fact, July corn, which had reached its target of 778, looks decidedly sick.

November beans may be shifting into neutral. July beans are neutral to bearish on the charts. On the CoT we see shifting opinions as well. The funds reduced their longs considerably, matched by commercials reducing their shorts. Small specs increased their shorts.

Wheat looks pretty sick, both old crop and new crop. July has a downside target of 675 and December seems headed back to its mid-March swing low just above 750. On the CoT we see the funds long, though not heavily so, and the small specs short. Commercials are all but absent from the net position numbers, but are slightly short.

Summing up, the big surprise is the bullishness in new crop corn. This is the time of year when prices are usually other than bullish. While one never knows what the little gods of weather will bring between March and September, which is to say one cannot be certain of the crops, if the past repeats itself, we will see substantially higher prices in corn and beans by October.

I would like to be able to report that crude oil prices have reached the top and are now looking bearish. Alas, I cannot. There is nothing bearish about the chart. The CoT has some hopefulness for the consumer: the funds have been releasing their longs for a month now, taking profits I suppose. Or maybe they don’t want the CFTC and the DoJ looking at them again for their tendency to end-run position limitations. Or maybe it is the arguably dishonest bankers, the boys who enabled the end-run, who fear the DoJ. A fried of mine suggested that the bankers whose banks had to be bailed-out at taxpayer expense should be liable for the entire amount. Seize their money and possessions, sez he. Theoretically, the constitution forbids forfeiture of estate except for treason, a hold-over from eight hundred years of British Law. Of course, the Supreme Court doesn’t feel the letter of the law applies to them, and we have seen many an estate forfeited for reasons the court felt politically expedient. But that is a different story, isn’t it?