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Senior Contributor

OptionEye - The Cow Guy - Jan 13th

Good morning. 

 

Well, as far as action, Friday did not disappoint. 

 

The corn numbers were confounding but mildly bullish. We had a 15 cent turn around pretty immediately and solidly established an uptrend. There were a lot of late shorts that got blown out. Ending stocks and production both came in under estimates and while the numbers were bullish on the day the report also showed a lot of unpriced corn out there. 

 

Wheat was bearish and definitely traded that way. The bean numbers were kind of benign and we closed a bit stronger. This morning we see corn holding its gains up 2, beans are unchanged and wheat is bouncing back, up 4.

 

The non-farm payroll numbers also surprise coming in at 74k well below the industry guess of 225k. 

 

That has sent the 10 year rate tumbling to 2.85%. Stocks were slightly lower on Friday and they are again this morning. 

 

Gold is down $2.17 at $1246.28 while oil is down .81 cents to $91.91. 

 

The options market tends to digest this type of news in both ags and fixed income over a few days so it will be interesting to see how the market shakes out here today. 

 

 

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Senior Contributor

Re: OptionEye - The Cow Guy - Jan 13th

Scott..... I find it a little humorous that the market was SOOO far off on the 1st 1/4 corn usage...... 

For one thing we were quite literally at the end as it relates to pipeline stocks..... We now know what the actual pipeline is..... 821 mil bu...... Also at least around my parts and suspect others as well these livestock guys were feeding everything fro nuts to berries to get thru until new harvest.... Every silage guy that would normally have a little left most yrs was completely out.... SO a lot of that corn was used up that would come to town most yrs..... IMHO this market is fooling it's self thinking that a 1.6 carryout is big...... When we were only using 10 or 11 bil a yr it was..... Now we use 13 going on 14 next yr (maybe)...:~)..... 1.6 is the old bil when it come to ending stocks......FWIW..... p-oed

 

Ps.... I think that there are a lot of other examples that can explain why feed usage was as big as it was..... but mostly a big emt hole to fill......

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