Corn Market
So much for the corn market running out of steam! New fund money coming into the corn market prompted by the lower US dollar, higher metals and higher crude prices all worked together to push prices higher led by the old crop. It is my belief this is called a “hedge against inflation”.  That is really the only reason I can justify old crop leading the way. We are not going to run out of old crop corn. Weekly export sales were nothing to write home about. We should see deliveries in the AM. Last year interim highs were made in the last week of February. The corn market has been a follower all season. I don’t see why that should change now. Month-end is notorious for sucking in new money into the commodity sector.  What do we do for an encore?  As of this writing I don’t trust the corn market as far as I could throw it. The wheat market, I believe, made a blow-off top the other day; I’m starting to think the corn market may be next.  I don’t think July corn is worth an inverse over December corn. The specs have taken us up; the specs will take us down.

Wheat Market
Weekly export sales were mid-range of expectations, but still too large as far as I am concerned.  Kazakhstan decides not to impose any export inspections on its old crop wheat supplies.  Supposedly the US is going to import some wheat from Germany. The $2.00 intra-day rally on Wednesday was supposedly an error/some major short getting blown out of the market.  Argentina decides to continue to limit export registrations until a better handle can be made on the rest of the World’s new crop. Personally, I think this market is done – put a fork in it. The volatility/margin requirements are such that this game is only for the “well-heeled.” As we draw closer to a new crop reality, unless there is another spring freeze, US stocks, as well as World stocks will quickly replenish the current depleted old crop stocks. I think it is just a matter of time before we see multiple days in a row of losses here.  The action of late is classic of a “blow-off top.” I am hearing cash prices are starting to waver for the spring varieties.  That is the market that took us up; will it be the market that takes us down?  Chgo should have deliveries in the AM.  At current price levels that is not too bullish.  Like I said, “Without weather this spring, this market is done”.

Soy Complex
Like corn the higher soybean market on Thursday, I think, was all about “hedges against inflation.” Weekly export sales were deemed just “okay.”  I fully expect to see deliveries in the AM, especially in soybean oil.  Monthly crush data was not as robust as some had been thinking. The spec trade is running the veg oil markets.  Bio-diesel is not the money maker most had been hoping for. The palm market is showing signs of wavering. Once that goes bean oil will follow. Here we have bean oil at more than full carry in the nearby spreads and we are expected to believe this is a demand market? Bean oil has been the driving force higher; it will be the driving force lower even though meal will gain on oil during the break. Remember, the funds are bigger players in bean oil vs. meal due to the meal market’s supposed lack of liquidity. As far as I am concerned there is nothing slicker than the “grease” market. We have just seen the wheat market give us blow-off top; it wouldn’t take much to have the soybean market correct $1.50-$2.00. The kicker is that old crop soybeans are still good ownership after such a correction. The old crop new crop spreads are trying to tell us that new crop has found sufficient acres, otherwise the July Nov spread wouldn’t be sitting at a $1.00, especially with the flat price sitting at $15.00 and $14.00 respectively. I think it is time to be leery of ownership at current levels.


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