Why good beans, weak wheat? I'm interested in your fundamental argument. My argument from the other side: Last WASDE has 33% greater ending stocks of beans than any time in more than 20 years. With soy oil languishing, crushers are really only able to sell meal at a good price. The only strong fundamental argument for beans I can come up with is that farmers are being so strongly incentivized to plant corn, they may not plant any beans. Wheat fundamentals would seem to support a reasonably strong price. The export business has dried up, which is a cause for concern. Otherwise, our disappearance/ending stock ratio will be in the top 5 for the last 20 years.
Hey Fully... The bean:corn price ratio is so far out of whack, that in our opinion, it all but assures that US farmers should have no incentive for planting any beans this year. Crop rotation aside, of course they will plant beans, and we'll see how many acres the USDA shores up in the March report. Our thinking is that we will see this ratio move closer back to some kind of normalcy, the kind of normalcy that you may see in a market obsessed with biofuels and with hugely leveraged indexers...Maybe just under 2:1... As for Wheat, she's a weed, and she always has been and always will be. Australia is producing a monster crop this year to make up for their drought-ridden episode last year....and rationing and export cancellations (as you mentioned) appear to be a driving force behind this market along with the rest of the grains... If we do gap and crap today in the grains, we may have a lookout below situation...It may be short-lived, but it could be extreme...
Has volatility come back to play? Who knows, but this chart certainly looks interesting... S&P (black) vs the $VIX (red)
I'm not sure what this means--the AD has stayed strong, but the CD looks to have found a bottom, amazingly enough. I entered this trade March 1st and have been pretty happy. We'll see going forward, though.