This is a bit of a departure from recent patterns…Higher trade on a Monday morning? Granted, the day has barely begun so there is certainly no assurance that this budding strength can be maintained but it would appear we have at least for now broken the death-grip that the bears had on many commodity markets. This must be what the long suffering Cubs fans feel like after the team wins a few games in a row as there is still that nagging feeling the momentum will soon wane.
One has to imagine that the strength is a combination of follow-through buying from the positive closes on Friday and possibly a little additional pre-report short covering as there is little in the news this morning to entice the buyer. Although we sit in a region of Northern Illinois that missed the rains over the weekend, it would appear that a large swath of the Midwest from Illinois west received nice rains over the weekend and we still have a few more shots for showers this week. Temperatures could only be described as pleasant.
While not “official” tours or estimates, there are more and more stories drifting around of individuals and companies out conducting independent scouting. While I recognize we tend to gravitate towards listening for the extremes, more than one summary that we have seen report that “all that is green is not gold.” This should not really come as a surprise as in a year such as this when the issues occurred early, and crop ratings are solid, it is easy for people to assume many of the problems just went away. Of course we know what can happen when we “ass-ume” things.
Funds continued to liquidate longs last week and appear to now hold just over 160,000 contract of corn and around 50,000 long in beans. They are short about 14,000 contracts of wheat. We suspect most of the trade between now and Wednesday will be getting people into the position they want to sit through the report.
The bean market is the leader of the pack at this point, which is understandable in the respect that it is the only market here that appears to have stimulated much demand. Not only were the weekly sales for new crop solid last week, we saw several good sales reported in the daily system. Note that beans actually gapped higher this morning and had we not rallied through the 9.63 level on November beans last Friday, we potentially would have left a two-week island reversal this morning.For now, there is little more to do than to patiently await the “word of gov” come Wednesday morning.