Good afternoon friends!
Corn 355’0 -2’4
Soybeans 1012’0 -13’0
Chi Wheat 413’4 -1’0
KC Wheat 415’6 -1’4
Cotton 70.89 +1.13
It’s end of the week…. on a side note I want to mention that I live about a mile NW of Wrigley Field, so if I don’t make it in on Monday it’s because the neighborhood burned down.
The markets had a nasty close to the week, breaking substantially in the case of soybeans right about the same time the news about Hilary Clinton broke. I was down on the floor for some of the morning, it was a graveyard. The announcement that a story exists that could affect the certainty of her presidency. In my opinion, the market is trading like a victory is certain. Let’s take a look at the Mexican Peso on this news break:
My point is to remind everyone the markets are staring at a pretty important world even, a week from Tuesday. While I remain bullish of corn longer term, I might think about preparing for a break in price as November is pretty bearish for the futures markets. If you must price off March, I would recommend some shorter term delta. The corn market in 2017 feels pretty bullish to me,but the MRCI seasonals are pointing toward the exits.
Nov beans having trouble near $10.20 and then flushing on the close is a bad sign. Soybeans feel like they capitulated today with Nov 17 beans closing below 10.00. Basis is weak as producers move the record harvest out of the fields soybeans . I assume CFTC numbers were elevated this week, and again Ill reiterate the short profile doesn’t exist right now so there are weak longs waiting to be trapped at play here. The seasonal is not as weak as corn, but it exists. Sell November 17 beans at this level.
There is little wheat news around right now. Maybe a small problem in South America but nothing else globally seems to be in the news. I remain bullish wheat over the longer term, but like corn I think wheat faces problems in the months ahead given a continued strong dollar and no weather story. KCW has something developing in Western Kansas, but its too early to talk about ’17 carryout cuts.
I expect the cotton market to fixate on the Nov 9 WASDE report. COT reports will show a long position that is near historical highs. The reports I hear out of Lubbock are pretty positive. With continued dry weather forecasted for most of Texas, I am confident harvest should go pretty well. But there is a small spot of above average that boarders right on some heavy cotton ground, rain would be bad for yield certainty at this point. I think a weather issue could push priced back to summer highs but I do not plan on getting bullish up there. I remain bearish with the hope of selling Dec 17 at 73 cents.
Until Monday….
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