Good morning friends!
Corn 351’4 -1’4
Soybeans 973’4 -2’4
Chi Wheat 417’4 -2’4
KC Wheat 421’0 -‘6
Cotton 70.27 -.88
Sorry for the lack of a report yesterday afternoon, I was in South Bend with the Ag Day people dropping some knowledge. Thanks to Tyne and the crew for having me, its a trip to see myself on the little screen. Hi mom…
Is it any surprise cotton is lower today?
Markets traded lower in the overnight after the nasty close yesterday. Corn and beans had some mojo mid session, when I looked at my phone on the close I was disappointed to see Beans fail so badly as deferred contracts trade to 10.00. I remain bearish soybeans at these levels, there is just no fuel to push the markets in times of bullishness because the short seller is not involved, which means they are not buying back short positions.
The Board here in Chicago had enjoyed 3 days of fund buying and a correction is expected. The key will prices holding above technical support at $3.48 December corn, $9.65 November soybeans and $4.12 in December Chi wheat. The CBOT is shifting its focus to large demand and away from the record large US crop for now, South American will move into the forefront in coming weeks, as will US new crop acreage. This is where I think wheat can perform, especially with this historically short position on the books.
Rain is expected later this week across N Brazil and another chance of rain for S Brazil and Argentina this weekend before things dry out again. The rain across N Brazil will favor the soy crop with seeding active across the Mato Grosso. The only areas of concern are Bahia and the remainder of NE Brazil where a drier weather trend persists. World wheat prices were steady overnight with Russian wheat offered at $178 for November. US wheat is noncompetitive based on the recent CBOT rally. US wheat values cannot get too far ahead of the Black Sea markets as there is little fundamental reason for it to stay there. I look for prices to open up and trade with bigger ranges (hopefully upside) when the new crop story allows.
Cotton futures look like they are making a move back south of 70.00. The market remains inverted which is a good sign for demand/supply structure, but I can’t get bullish here. I think I cover it pretty well in the video above. I would look to sell Dec 17 futures and buy bull futures spreads (Buy March sell Dec) if you are nervous in the short term. Outright sales in Dec 17 are recommended at 73.00.
Happy trading everyone.
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