Pitguru's Review : Grains - July 26, 2010

Discussion in 'Ag Futures' started by learnfutures, Jul 26, 2010.

  1. By PitGuru Matthew Pierce

    Friday saw a choppy session with beans and wheat posting inside days with corn breaking under the 100-day MA under weight of farmer selling. The trade lacked any smoking gun allowing for the messy trade with exits out of longs evident in beans as old new spreads work to tighten. The lack of a weather threat domestically continues to weigh on the trade allowing for bears to get a firm handhold again especially in corn with massive movement seen over the weekend. Commercial elevators are rejecting #3 corn due to oversupply of worthless corn at the Gulf. The overnight trade continued the bearish undertone with beans leading the downside charge lacking any weather problems over the weekend and demand remaining quiet this morning. The day session looks to open in line or weaker than the overnights as weak length continue to search for cover.

    The problem with the trade right now for bulls is the massive amount of weak longs in all markets. The only bearish market remaining is bean oil representing the only new short remaining. I have to continue to favor the downside with corn and wheat the most susceptible to continue to fall. Beans have a glimmer of hope with China continuing to take US beans due to the increasing political snafu between Argentina and China. This is a massive boon to US sales with China taking 226 US new crop beans this morning adding to the 400 TMT they took last week. This adds pressure to bean stocks with the early talk of new crop carryout over 350 million dwindling by the day.

    Another factor to watch coming up is the corn/wheat spread. This has rallied from 1.51-2.51 in the recent wheat rally with the July 2009 high at 158 offering the next test level. I support looking at the bear side of wheat with the Quality council doing their crop tour this week. Early expectations are for HRS yields to exceed 44 bu/acre adding more pressure to the inflated contract and spreads.

    Overall the week ahead looks about as calm as I have seen in 2 months. There is little fear of weather, demand outside of beans remains quiet and longs are under pressure. This should be a week for bears unless something crazy happens…which it always does when the market least expects it. Look to the downside in all markets this week with bean oil looking to gain against meal, old crop beans lose to new crop, corn gains against wheat and beans continue to regain lost ground against corn.
    [​IMG]

    chart courtesy Gecko Software’s Track n’ Trade Pro
    Past performance is not necessarily indicative of future results.

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  2. I see you are back. Perhaps you could stuff your personal daily reviews into a Journal, like everyone else?
     
  3. JPope

    JPope

    Why would you post a review of Friday's trading session on Tuesday? Am I missing something?
     
  4. He's providing you the experience of reading yesterday's news, today! :D
     
  5. JPope

    JPope

    Hmmm...I wonder if there's anyone that will let me pay for this privilege on say a monthly or semi-annual basis?
     
  6. local

    local

    Just curious, why even post something like this. I don't see the value.

    Local
     
  7. "The problem with the trade right now for bulls is the massive amount of weak longs in all markets."

    "Look to the downside in all markets this week with bean oil looking to gain against meal, old crop beans lose to new crop, corn gains against wheat and beans continue to regain lost ground against corn."

    "I have to continue to favor the downside with corn and wheat the most susceptible to continue to fall."



    Just on Friday, Corn up 13 1/2, Beans up 26, and Wheat up 34

    It appears the massive amount of weak longs in all markets had their way with the bears.
     
  8. Looks like the "massive amount of weak longs in the grain markets" got hurt again in the night session. Sometimes grains do make a turn near the 1st of the month, so maybe this pit guru will gets some help soon. In the past wheat doesn't usually rally $2 when farmers in the US raise good yields like this year.

    Also I wouldn't be too negative natural gas with the grains firming up.
     
  9. bone

    bone ET Sponsor

    Agree, please start a journal as this will get messy in a hurry.

    BTW, weekly supply figures, HDD forecasts, and the BTU spread are going to influence Natural Gas prices orders of magnitude more than the ethanol crack.
     
  10. The "massive amount of weak longs in the grain markets" are really having there way with the bears now. Wheat was up 40 cents on Wed and it's up 60 cents in the night session. Nice call pitguru.

    Do you have clients that pay for this advice? Maybe I should ask if you use to have clients that paid for your advice because they got run over by this train.
     
    #10     Aug 5, 2010