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07-13-2013 05:58 PM
07-13-2013 07:34 PM
I see it as pretty straight forward. 12/13 in corn beans was a rationing year, price had to rise enough to force using less. That happens 1/7 yrs or so. But the market can’t wait until the end of the mkting yr to then, ration, end-users can’t risk that, we rationed all yr long, 8$C did its work. Down to the finish, any enduser of any substance gas to have coverage, the norm is the mkt process has taken place even at harvest in 12, this yr perhaps because the mkt is coming to realize demand id more inelasctic than 10 or even 5 yrs ago, prices held up longer and or maybe supply was smaller than the uSDA had guessed.
As of July 12 old crop is pretty much over, we hear of some wild 2$ over buys somewhere last week?, locally could be some wildness left.
But the mkt ius starring at new crop, vs a slow start, the crop has palyed catch up with excellent conditions mid June on. Some C and S didn’t get planted, but relative to the composite it doesn’t count.
Trendline we need to remember reflects average conditions, not perfect. Every yr yield isn’t below average, even in LakeWoebegon. If weather stays as positive as it has been, we could even go over trendline, some odds anyway.
Though we get used to 15$ beans and 7.50 corn, reality is all commodes trend towards the cost of production over time. Back to back bad Wx equaled exceptional pricing and farm income hit records for, 2 or even 3 yrs? Someones sold land at 12k/A, others sold it to them.
Wheat, correct me if I am wrong HRW prod went down, it is a poor crop. World wise ES/production are positive, thus limiting price advances here. SRW I think is what pushed the total WW # up. The forecast is for 535 million bu. WAY beyond our normal food/feed/export use. It gets no discussion here, my table pounding is ignored even for discussion. Supply/demand table has huge ES, and my guess, usda is over estimating feed use. Once feed users are using new crop priced corn, IMO, WZ, Chicago is worth about 1$ less, that fast.
07-13-2013 07:36 PM
I think advisory services have a hard time getting bearish, producers WANT to hear teh bukl case,
and any rational advisory who had been scaling selling teh last 2 yrs, looked bad with early sales.
I think thise items affect their objectivity even if subconscious.
07-13-2013 09:30 PM
allow the speechlessness to get your attention. When things that made sense before and now do not............that is called a pattern shift or change, in and of itself............................................
i wonder how the crops are making sense of their growing season, so far....can only imagine they are thrown off their game somewhat. We'll see what their perspective is in a few weeks......................................
07-13-2013 11:19 PM - edited 07-13-2013 11:21 PM
Ray, what do you make of this? and how does it look relative to other times? thx, c-x-1.
COT -- Supplemental Report - Option and Futures Combined Positions as of July 9, 2013
: Reportable Positions : Nonreportable
: Non-Commercial : Commercial : Index Traders : Total
: Long : Short : Spreading: Long : Short : Long : Short : Long : Short : Long : Short
CORN - CHICAGO BOARD OF TRADE
CFTC Code #002602
: 204,094 325,327 488,715 386,453 529,328 424,652 46,820 1,503,914 1,390,190: 173,228 286,953
: Changes from: July 2, 2013 (Change in open interest: -816) :
: -2,794 26,606 -1,644 -3,947 -19,550 1,664 2,205 -6,722 7,617: 5,905 -8,433
: Percent of Open Interest Represented by Each Category of Trader :
: 12.2 19.4 29.1 23.0 31.6 25.3 2.8 89.7 82.9: 10.3 17.1
: Total Traders: 780 Number of Traders in Each Category :
: 159 238 262 278 298 29 19 631 665
07-14-2013 04:58 AM
Let's take a stab at that.
Spreading is the lead activity ---- 29+% of the open interest. ------------- I would say we have a volatile market without direction. Knowing it is wrong but not knowing where to go to get right. ------- few actural hedges being placed --------- very little actual inventory being priced. ----------- A VERY Thin trade.
Indicative of lack of supply sell or buy on the cash side. ---------- "doesn't make a difference what the price is if there is nothing in the show room to sell. " And the wanta be buyer is driving the price down starting rumors of future supply while the seller knows it is all just hot air until he has something to sell. ------------ There are only a few reliable sources in the world for grain.
07-14-2013 07:24 AM
sw has it right........we are in a market that is dominated by spread trading......this is one of the more classic old/new crop corn spread scenarios since 1996.......
if we get a 12.5--13.2 crop, it will be interesting to see what kind of hedging activity eventually transpires.....farmer is far undersold on new crop corn....if they can continue to hold all through harvest, we might get a pop, but that would likely be one that needs to be sold, as the corn would still be in the farmer's hands......and that is normally not a winner for the last half of a marketing year....
but it is a global market and things can change.......both directions!