Good morning.
Very nice move in the grains overnight as the 'Garden of Eden' turns into Death Valley. Crop conditions worsened in yesterday's report and development lags behind. This is probably going to be the way we trade for the next 4 weeks. It's kind of schizophrenic. Beans up 20, Corn up 12 and Wheat up 8.
Equities struggling today as Coke earnings and Europe drag on our positive Goldman Sachs earnings reports. The 10 year is still stuck at that 2.55% rate and I think that is the number we watch going forward. The equity market right now is a little too rigged for me with the FED intervention. The bond market will really let us know what is happening.
It will be really interesting to see what all these put buyers do on a day like today. There has been a lot of activity in the out of the money puts and there is a record short in fund positions. All this leads me to believe we are going to have days like today because nothing is that easy. We are going to have to have some funds cover shorts and puke out puts before we go lower...if at all.
