In Transition

Published on: 17:29PM Aug 13, 2010

Thursday’s USDA numbers gave comfort to bean growers, limited comfort in corn and no further comfort to wheat farmers.

Beans: Today’s chart was constructive. Technical price estimates are 1056 to 1075 basis November. Trend following funds got a little longer, commercials a little shorter and small specs got a little less short. I would expect this to be the last major leg up, presumably leading to a final top for 2010.

Corn: Today’s chart was a so-called consolidation day. That means the market elected not to tell us much. What today did not do was make a new high, nor did it have a downward facing day like wheat. The two most likely scenarios at this point are (a) die right here, or (b) move up to 436-439, pretty much equaling last week’s high. The third possibility is the bulls will gain traction and be able to take prices up to the 450 area. Selling near 450 is likely to be intense. The CoT’s of corn are the same as beans: funds added to their long positions, commercials added to their shorts and specs subtracted a few from their shorts.

Wheat: Today was fairly negative for wheat. The bulls couldn’t manage a higher high, an open above yesterday’s close or a higher close. They did manage a higher low, but that on a good day for beans and a not-bad day for corn. Wheat should, in theory, manage at least 759½ before dying, and 788½ would be more normal. Those numbers are written exactly, but that doesn’t mean I would expect reality to be exact. I’m sure everyone has noticed that it rarely is. Wheat CoT’s are a little different: everybody stayed where they were a week ago.

Oats: Reread wheat, except for the numbers. A weekly close below 265 should take oats down to 225 and possibly lower.