December corn was up better than 60¢ on the week, as reality returned to the market place. Unsurprisingly, the trend-following funds expanded their longs going into this week, and likely expanded them more this week. One might reasonably expect a couple of down days next week, but nothing very serious.
Funds expanded their long positions in beans. Farmers and small specs reduced their shorts while commercials sold to everyone else. Prices are getting near the $14 (basis November) barrier. Actually, I should call it a reflective surface, not a barrier, since there is no particular reason to believe prices cannot or will not go through. The interesting question is whether beans will be towed along by corn or will, instead, develop their own legs. If the unusual weather so much of the country has had this year follows along through summer and into early autumn, beans may under-produce by quite a bit. Weather is tricky business, as farmers know entirely too well.
Wheat, dear old we-gots-too-much-wheat, wheat. Commercials reduced their long positions, funds reduced their shorts and farmers stayed short. Wheat prices struggled, although Tuesday and Wednesday were both strong days. I’ll be surprised if wheat does not drop to $7 or lower, basis December, this coming week. A low above 650 followed by prices nicely through 750 will go a long way towards getting wheat upward bound. Even so, it seems it will be pulled along rather than leading the way as it did last year.
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