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Updat Feb 13 2011

Published on: 15:09PM Feb 13, 2011

Wheat rallied a bit and funds got a lot longer. Commercials sold to them. After 106 days of drought, China caught some snow. Even so, without a slightly miraculous amount of precipitation, hopefully mostly snow, China will see a substantial reduction in its 2011 wheat crop. December wheat is looking more bullish than the old crop. No doubt, funds are hoping to see an Australian or Russian or even, heaven forbid, an American crop disaster to blow the lid off wheat. 

Corn is in the reverse position of wheat: December corn is cheaper than old crop. The funds reduced their longs this weak but commercials increased their shorts. Farmers seem to have released the short positions needed to make up the difference, likely a wise move.

Old crop beans are looking like the fat lady will sing soon. November beans not so much so. In fact, November beans are still solidly bullish on the chart. Funds increased their longs for the second week in a row, and commercials sold them those contracts. 

Oats are like beans, technically. The old crop looks weak on the charts, while December is strong. Both funds and small specs increased longs for the second week in a row, with commercials selling to them.

In the US, it looks like the groundhog was right, at least for much of the nation -- winter, she ain't over yet. Better snow in the croplands than bare ground, that's certain.