This is a sample entry from John Payne’s newsletter, This Week in Grain, published on Friday, September 16, 2016.
Happy Friday everyone!
Welcome to This week in Grain’s weekly wrap. The week was slightly negative for all of the row crops, as all the markets I follow with the exception of wheat was negative for the week. Corn was down 3 for the week but up 6 today. KC and Chicago wheat are just above unchanged for the week and up 3-4 on the day. Soybeans led the charge as short covering brought the daily close up 15.75 from yesterday but down a 12 cents on the week. Cotton lost about 40 ticks on the day, closing off 1.75 cents for the week.
Lost in the fog of war this week was the WASDE report from Monday. I think the theme of the week for corn and wheat was hope that prices are carving out a long term low thanks to a relatively rosy demand outlook. Supply carryout’s came in tighter for the two feed grains, albeit slightly. Soybeans had a tighter old crop carryout and a bigger new crop carryout than expected, because of the new crop yield offsetting higher demand. I think soybeans and cotton were higher toward the back end of the week because of this model run. Frost isn’t a problem this year but the rain might be. Harvest delays aren’t a threat yet but an inundation of rain could keep farmers out of the field and the market waiting on its new crop. November should reflect that conditions. Cotton has a similar story, only the old crop stocks aren’t near as tight.
I’m going to start doing some audio updates throughout the week. I look to launch into the Podcast section of your IPhone or Android device in coming weeks, so you can get the audio sent onto your smart phone. As of right now it’s just living on our website, if you have 8 minutes take a listen. Ill be trying to post these in the am and pm. Writing and dealing with brokerage is becoming difficult and this is an easier way to keep ya’ll informed. I’ll maintain my prose, but it will probably come only a few times a week where the audio will come twice a day. Stay tuned on this.
COT reports were just released, still showing the same story as we have been following for the last few weeks. The wheat and corn markets remain historically net short (and straight short) in the spec category while the cotton markets remain just off historically net long territory. It should be noted that in wheat we are seeing some speculative length coming in that concerns me. The net remains historically short in wheat and I think there is definitely a rip coming, but the market seems to be seeing more than its fair share of bets made that way of late.
Based off these, over the longer term I remain bullish corn and wheat and bearish cotton. I am neutral soybeans over the longer term at these prices. I would be selling November 17 especially on rallies toward 970 and the Nov 16 on rallies to 10.00. Over the short term I am neutral to bearish corn (I think odds are high we see a test of 320 again) and neutral wheat, and bearish soybeans and cotton.
Thanks for following along, have a nice weekend.
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