"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat


Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

Trader Dan's Work is NOW AVAILABLE AT WWW.TRADERDAN.NET



Monday, July 14, 2014

USDA Crop Conditions Ratings

USDA reports from the field are in for this week.

It might be hard to believe but the corn crop actually improved even more. Last week it was rated at 75% Good/Excellent. This week, that category increased to 76%. The improvement came at the expense of the Fair category which dropped 1 point to 19 from 20. That one point drop in the Fair ended up in the Excellent category which increased to 22% from 21%.

Improvements came in the Missouri crop. The big three, Iowa, Illinois and Indiana remained the same at a healthy 108, 111, and 108 on the ratings table with 100 considered normal.

34% of the crop is silking compared to last year's 15% and the 5 year average of 33%. The crop is way ahead of last year but right about on schedule.

On the soybean front, the percentage of the crop rated Good/Excellent remained the same at 72%. There was a 1% increase in the crop rated Excellent at 16% compared to last week's 15%. That came out of the Good category which dropped one percentage point to 56% from last week's 57%.

The Fair category lost 1% to the Poor category. 22% of the crop is rated Fair this week, down from 23% last week. 5% of the crop is rated Very Poor, up from 4% last week.

41% of the crop is now blooming, way ahead of last year's 24% and compared to the 5 year average of 37%. That earlier bloom period is important as it puts the crop a bit ahead of schedule meaning the current benign weather will keep it supported ahead of any potential heat/dryness issues that might arise in August.

There is a bit of chatter that this week's Polar Vortex (yes, you are reading that correctly) which is expected to hit the Mid-West later this week bringing unseasonably cool temperatures with it, might slow the crop down somewhat due to the lower overnight temps but I am not so sure about that. It takes soil a long time to cool off and a few days of cooler weather, along with sunshine I might add, is not going to impact soil temps all that much in my opinion. Mild day times temps will continue to eliminate any heat stress issues for these plants.

As far as the big three go, the Iowa bean crop improved to 106, the Illinois crop improved to 108 and the Indiana crop remained unchanged at 105.

Beans popped higher today on thoughts that possible hot/dry weather in August could crimp yields but that remains a ways off and thus far I have not seen any forecasts calling for that. What likely happened is that some shorts decided to book some profits after the market spiked up off its worst levels on Friday after the initial reaction to the bearish Supply and Demand report had run its course.

Corn and wheat got bumped higher as well on ideas that the sharp fall in prices would generate some commercial buying interest.

Switching gears here I am noticing that the gold miners ( HUI) is closing very near its low on the day. Ditto for the GDXJ which is down nearly 4.8% as I type up these comments.

The long bond is a tad weaker today. Expectations are that Yellen, speaking on the behalf of the Fed and not herself, will sound a bit more hawkish view on interest rates. Some of this was also a factor in the gold price drop today.

Some longs got nervous looking at the sharp spike in the number of NET LONGs among the hedge fund category. That number leapt from 51,280 the week of June 10 to last week's reading of 136,929. That is a significant increase in a mere three week period as it almost tripled.

We'll have to see whether or not gold can remain with a "13" handle in front of it. Much will depend on Yellen's testimony and obviously how the market reacts to that or how it interprets her comments.

I think people are coming around to the consensus that interest rate hikes are inevitable. No one seems to have the time nailed down however. That is what will be the focus.



27 comments:

  1. Gold Correction Is Over


    Posted January 12th, 2012 at 12:32 PM (CST) by Jim Sinclair & filed under Alf Field.

    Jim Sinclair’s
    oh well, maybe next year

    ReplyDelete
  2. May I respectfully recommend that readers pay attention to the following, which I believe represents something of a sea change in investor sentiment (though I am not yet sure quite why)

    In early April, the Gold curve was in backwardation way out into the future, and GOFO rates were negative: see, for example, http://www.ingoldwetrust.ch/gofo-turned-negative-again-the-consequences

    Now, 3 1/2 months later, with the Gold price more or less the same, there is a very healthy positive carry to be earned on every contract month right the way out to Dec 2015: http://monetary-metals.com/monetary-metals-supply-and-demand-report-13-july-2014/

    I have no idea what this portends for the short-term price of Gold - on the evidence since April, presumably none - but I cannot interpret it as being in any way positive. We have been living with Ukraine, ISIS, Portuguese and Bulgarian bank crises, Gaza, the worst US GDP print in living memory, and Yellen making crassly unguarded comments about rates and inflation, but still investors are dishoarding physical metal - which is now quite clearly in abundance (see yesterday's record addition to GLD, for example)

    What is going on here? Is this just complacency? Is it just temporary? Whatever the answer, I believe it merits your considered attention

    ReplyDelete
    Replies
    1. Zhang, my friend, the sooner you start ignoring backwardation stories, the better your trading will be. If you want to be bullish gold or stocks on a spread basis, you sell the front and buy the back, UNLESS of course you expect interest rates to go to -5% or something. good luck

      Delete
    2. @ Zhang Lan,
      Could you please give ma a link (or explanation) on the context between 'dishoarding physical metal' and 'record addition to GLD'.
      Thanks in advance.

      Delete
    3. addition:
      When it says "GLD inventory has risen",
      does it mean 'Investors had bought certificates and so GLD had to collect the necessary underlyings",
      or does it mean "They took over material (just for storage reasons) that was getting free, because investors had sold certificates."
      Makes a big difference...

      Delete
    4. Hi

      Alex -

      if you follow the link to Keith Weiner's www.monetary-metals.com, in his latest Supply & Demand report he makes explicit reference to this. If GLD is accumulating physical Gold, then it is a fair indicator that there is no immediate shortage

      @steve

      thankyou - after 31 years of successful trading, I was beginning to wonder how to suck eggs, and am grateful to you for telling me. How is being an arrogant jerk working out for you these days? I had pointed out in my original comment that "I have no idea what this portends for the short-term price of Gold", and so I had assumed that you might have realised that this is not the kind of information which I believe you can trade off. However, it is nonetheless information, and I believe gives a useful insight into aggregated market sentiment. Certainly, it gives the lie to any suggestion that the vaults are empty and there is likely to be a mad panic as COMEX defaults - COMEX inventories remain in rude good health, as it happens

      And a tip for you, my friend - if you want to be bullish on Gold, selling the front month isn't going to help you on a delta basis - simply going long the back month (or indeed any month you choose) will set you up in a Long position just fine

      Delete
  3. chicago wheat (ZWu4) came out of the tomb a bit today... 551 on the active continuation chart is a key number, the jan. low.... checking out last week's volume it wasn't extreme, so a 'spring' above the 551 would be tempting the funds to cover shorts or defend their longs.

    novy beans (ZSx4) right back into the jan. low 1088.25 zone.. volume last week was way too high so not as bullish as wheat could be. 1095 is also seen on charts as a resistance point.

    the managed money category in soybeans is nearing a record short, with last tuesday cot putting them net -43K and would think they sold more weds thru friday.

    'The market psychology for corn is reminiscent of 2009 when corn continued to discount the G/E ratings right into the end of August taking corn to the $3.00 before a "frost scare" rebound into September.' (gulke)

    NDX NQ fulfilled the 'holy grail' long from last week's 20-DMA touch. whether all the indexes make new highs of year to join the party can be the tell, if they do not then the weight for the summer correction increases.

    gold up 6-weeks in a row was overdue to begin a correction. last weeks best up day had a poor close, faded right into the 1334 fib to close that session...the stops must have been heavy below the 1330-1335 zone in gold.

    cheers!

    ReplyDelete
    Replies
    1. 77;

      Thanks for the comments.... not sure what data you are looking at for the COT soybean information but as of last Tuesday, hedge funds were still net long beans although that was before the big Friday report.
      as far as being near a record short, that is not correct my friend.

      Here is the post I put up about this on Friday/Saturday:

      http://traderdannorcini.blogspot.com/2014/07/hedge-funds-bet-big-on-corn-and-lose-big.html

      Dan

      Delete
  4. Dan at what point does a whole foods (wfm) see their margins increase because of corns downward plunge?

    ReplyDelete
  5. Another missive on jsmineset about dumped paper gold during illiquid periods. Feels like the movie ground hog day. Well if true then "they" can do this to $900 and why even bother with gold.

    ReplyDelete
    Replies
    1. it wasn't "during an illiquid period" - I and the rest of Asia Pacific and the Middle East were wide awake and trading; or doesn't the Rest of the World count?

      Delete
    2. Zhang
      Sad but true. Many here are so USA centric the ROW does not count or is only lumped into that little ROW box. It seems to be characteristic of our local gold cult mentality.

      The size of the transaction would have swamped the market in any time frame?

      Xenophobia is an easy emotion for the writers to tweak when trying to create outrage.

      Delete
  6. Prophet, you are right; Sinclair and King are getting older by the day.

    ReplyDelete
    Replies
    1. just Sinclair and King? Well, my oh my - another nugget of wisdom from the Man Who Know It All

      steve - what (even approximately) was the purpose of that Comment? If you disagree with Sinclair and King, why not just say so (and maybe even explain why, if you have a reason rather than simply knowing better than they do)

      Delete
    2. Their frauds and sinclair a pathological liar too zhang

      Delete
  7. It would be sad if it werent so disgusting.

    If the market turns down the trx warrants will not be exercised. The money then runs out in less then a year. What was jim thinking when he raised the board compensation from 300 to 550 percent in 2011.

    ReplyDelete
  8. @Dan:
    Sorry to repeat a question I asked 2 posts ago (considered to be rude...) :
    Do you have an idea, why the CME Group LOWERED margins during a rallye?
    They (CME) says volatility had gone down (Bloomberg said so in an article). Is there a site where I can probe that?
    Many thanks.

    ReplyDelete
  9. Copper futures ended lower on Monday as steep losses in gold and coming Chinese economic data unnerved some traders. Rising stocks deter investors from betting copper higher.
    Commodity Intraday Tips

    ReplyDelete
    Replies
    1. I love Indian Mantra. Help you find inner peace.
      Let those words penetrate your subconscious mind.
      Repeat slowly 10 times, paying attention to your breathe :

      Capital Stars is a shitty website.
      Capital Stars stinks.
      Capital Stars, the name I will never forget.
      Capital Stars, the website of donks.
      Capital Stars want to be famous here.
      Let's make Capital's Stars wish come true.
      Together, let's spread the great news :
      Capital Stars is a useless shitty website.
      Shikah Verma is going to lose her job.

      Delete
  10. My dearest but very extended family,

    I have the feeling that gold is globally remaining in its 1180-1435 range, and that its price oscillations within it are making everyone hoping for a clear trend completely crazy.
    Imho as long as we remain within this range, prices will drift once up, once down, without a determined trend to play.
    All I'm trying to do is follow the fibonacci levels within this range, as they seem to provide some assistance to determine short term supports / resistances within that globally directionless range.

    Now, if you subscribe to my 40.000 $ newsletter, I will give you the secret Fibonacci numbers within that range, that is 1240,1277,1307,1337,1380, so that you can see by yourself that they do seem to be relevant at the moment.
    If you don't subscribe to my newsletter, a cycle inversion will allow me to send you very accurate forecasts regarding price evolution during the PAST two months. Thanks to this cycle inversion, you will be amazed to see how acccurately I can forecast the last two month's evolution of gold prices, very pretty close to the real prices!
    I hope that, after realizing that, you will all subscribe to the discounted 40.000 $ a year newsletter I mentioned above...
    Take care all,
    Your companion in golden newsletter, as always,

    ReplyDelete
    Replies
    1. NO need to pay 40 grand this shit it is for free at the jsmineshit.com site.

      Delete
  11. Hubert; You are a beauty! And I thought I was the sarcastic champ of all time.

    ReplyDelete
  12. For those following SP500, I'd like to share a remark : seems that the MACD (modified with my shorter parameters 9 20 7) is bouncing nicely on its propagation and extension axis. Bounces usually are followed by prices.
    As those axis are getting closer to each other, I would tend to think that we won't see much in terms of price action as long as MACD hasn't choosen clearly to break one of the axis.
    Conversely, if MACD breaks an axis, then it might signal the beginning of a stronger impulsion.
    I'm simply sharing this as an observation which might be useful and share the way I use some indicators for trading (and also so that you subscribe to my soon to come discounted 40.000 $ newsletter, of course).

    Have a nice day all, and especially all the donks of Capital Stars, the shitty website I'll never forget.

    http://i59.tinypic.com/eqcdwo.jpg

    ReplyDelete
  13. Hubert, that Shikah clown is annoying to me also. People like here and her company have no conscience. BTW, your 07 number on gold looks valid.

    ReplyDelete
  14. Commodities of every stripe getting DESTROYED while "Too big to fail" banks like JP Morgan Chase are soaring.

    Paper Rules!!!

    That's all you need to know, LOL....

    ReplyDelete
  15. Gold, weekly time scale.
    I could imagine a red downtrend as drawn below, and a short term upwards pitchfork in green. The support area of this pitchfork is 1290 (close of the week...doesn't forbid a quick test of 1277 on the daily time scale imho...).

    I'll watch to see who wins here, red or green :)

    http://i60.tinypic.com/108grgx.jpg

    ReplyDelete

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