“Woe to the land whose king is a child and whose leaders are already drunk in the morning. Happy the land whose king is a nobleman, and whose leaders work hard before they feast and drink, and then only to strengthen themselves for the tasks ahead”. (Eccl 10: 16-17)


"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


To continue following Trader Dan, please sign up for Trader Dan's World at the link on the sidebar to receive a 1 month, no obligation, trial membership



Monday, September 29, 2014

USDA Crop Conditions/Progress reports

Here are the numbers for this past week that USDA released this afternoon:

CORN

The crop retained its stellar rating at 74% rated Good/Excellent compared to last week.

The recent warm, dry weather did wonders to speed along the crop towards maturity with 96% of the crop dented compared to 90% last week and 95% last year at this time. The five year average is 97%.

60% of the crop is now fully mature compared to 42% last week and 60% last year. The five year average is 70%.

12% of the crop has been harvested compared to 7% last week and 11% last year at this time. The five year average is 23%.

The northern tier states are behind which is the reason that traders are reluctant to keep pressure on the corn right now as they want to see the % harvested move higher ahead of any potential wetness or killing freezes. That is giving the corn some lingering weather premium.

However, it should be noted that in those areas where harvest is either ongoing or has been completed, reported yields are coming in very, very strong.

SOYBEANS

The bean crop actually improved slightly this past week with 72% rated Good/Excellent compared to 71% last week. The Excellent category is where the increase came from as it gained 1% to 19 from 18 the previous week.

69% of the crop is now dropping leaves compared to 45% last week and 64% a year ago. The five year average is 71%.

On the harvest front - 10% of the bean crop has been harvested compared to 3% a week ago and 10% a year ago at the same time. The five year average is 17%.
'
About the same thing on the bean harvest as for the corn - it is lagging the 5 year average in some of the more northern states in particular but yields thus far that are coming in are incredibly high.

The market decided to move higher today ahead of tomorrow's USDA stockpiles report. the last number we had for old crop supplies stood at 130 million bushels. Some shorts decided to get out ahead of that number. I am not sure why anyone is especially interested in the old crop carryover at this point ahead of a carryover that is expected to be more than 3X that number but it could be some end of the quarter/month movement was involved here as well.

This afternoon's progress/condition reports show crops in outstanding condition and an ongoing harvest. Traders will react to any potential for harvest disruptions or freezes but unless any sort of hard freeze comes prior to the middle of this month, at this point, I do not believe it will make much difference in the general scheme of things. We'll see as we move forward.

One last thing - the corn/wheat spread continues to move against corn and in favor of wheat as it had started to do last week. I am watching wheat prices carefully to see if there is anything that might indicate a bottom is in for this market. Right now the chart is showing some decidedly bullish divergence on the RSI but the chart has not shown any confirmation of that in the form of a break over overhead resistance. A change in the handle from one of a "4" to that of a "5" might pique some interest among momentum-based buyers but for now the market is still in a bear trend undergoing some mild corrections higher.



What showed something similar in July and managed to rally about $0.40 before succumbing to another round of strong selling. It could conceivably rally to $5.00 but one would expect fresh selling to show up once again unless something had changed on the fundamental front.

Strength in the US Dollar has negated a considerable portion of the downdraft in US wheat prices.

Let's watch this however...( along with cattle for any sign of a blow off top which finally runs out of upside steam ).

On the hogs, the report has cast a bearish pall over that complex that will linger for a while but for the time being, the cash markets remain strong and with the board at a discount to the cash, we will need to see that turn before we can any move aggressive selling in this market. Expansion is here however and is not going away anytime soon. That is good news for those of us who are getting tired of paying the proverbial arm and leg for red meat.

Hey - Tuna Helper is looking pretty good right now!   It's too bad beef is a perishable commodity because buying it last year and holding it would have been a helluva lot better than "stackin' gold". On second thought, I sense some real potential here for any newsletter writers who want to concoct some theories about Beef Backwardation ( notice how catching the "B and B" sounds), or Famed Cattle Insider claims Massive Beef Buying seen at Costco. How did I ever miss such an opportunity?! He could also claim that he just narrowly missed being hit by a runaway forklift driver who was moving dead carcasses at the feedlot where he was conducting undercover surveillance as part of his whistleblower activities!



32 comments:

  1. Both corn & soybean condition index scores remain the highest for the week since 1994!

    wheat is the one most liable to a downside surprise tomorrow as stocks are burdensome and becoming more so.

    there was that nice sale on nov beans last time it touched the 10.00 rounder number, and now it's fallen so far looks like a 'not me' no matter what happens tomorrow.

    ReplyDelete
  2. gold and silver are right near their multi-month closing lows to end this quarter.

    will be interesting to see if any 'new money going into commodities to start 4Q' blurbs are to be seen late this week or next week.

    bubblin' crude with attitude up to the 50-day MA touch ... interesting if the mideast terrorists are stopped from selling cheap crude, doesn't price go back up.

    sugar and coffee nice start to the week in the softs.

    cheers!

    ReplyDelete
  3. Gold and silver may get a pop. The elastic band has been stretched too far for the dollar and main markets, and they need a rest.

    ReplyDelete
  4. "Monday, September 29, 2014

    Koven: "junior miners are starting to disappear", but hard-money fruitcakes aren't

    FP - junior miners starting to disappear as grim reality takes hold. I guess at least Peter Koven went to the the Cambridge House clownfest in Toronto last weekend, if nobody else. Me personally, I couldn't be arsed, since most of the speakers were utterly worthless; and I'd never actually want to meet IR clowns from a shitty exploreco, nothing they say is ever going to be informative to me.

    Here's Kaiser with his hopeful message:

    “It will be hard to raise capital for several years,” analyst John Kaiser warned in a presentation. He said there are around 700 mining companies on the TSX Venture Exchange with negative working capital, and the total number of small miners is shrinking. “They are starting to disappear,” he added.

    Dammit, John! You've been saying this for a year now. When will they disappear already? Or are they just going to continue polluting the Venture?

    This part was funnier:

    The Cambridge House show has always been a gathering point for some of the world’s most outspoken gold bugs, and they continued to pound the drum for bullion on Thursday despite a bear market that has pushed it down to around US$1,220 an ounce.

    “The U.S. dollar is on its last legs,” predicted John Ing, president and gold analyst at Maison Placements Canada. Others echoed that view.

    And that's the sad part: these idiotic scamfests are still full of hard-money wackaloons whose message is still crafted towards the unwashed toothless morons who have been wiped out by buying shitty explorecos. Don't they realize this is part of the problem?

    What Cambridge House needs, and what the junior gold world needs, is to cut loose the podcast & blogger crowd and start featuring real analysts with an iota of common sense.

    I mean seriously. Listening to "analysts" at a goldbug conference is just like wandering into a fundamentalist prayer meeting. The informational value is zero, you'll never learn anything; it's nothing more than a fantastical prayer-ritual full of magical thinking, mythologizing about imaginary demons, and fantasies about a future heaven where God gifts his Chosen people with a gold-backed dollar and Ron Paul in the White House.

    If 700 juniors are truly about to expire, that means 700 fewer scammers. The industry should no longer need to scam people with clownish presentations that have zero informational content and zero connection with empirical reality. Let's quit with the goddamn scams and become a serious industry, no?

    http://myownmarketnarrative.blogspot.com/2014/09/koven-junior-miners-are-starting-to.html?m=1


    ReplyDelete
    Replies
    1. Loren -
      Interesting. I think one of the reasons the many juniors continue to exist is that they are fantastic trading vehicles for HFT companies and, as the gold bugs are fond of saying 'da' boys.' My thesis: The easy short money on these stocks was made and that smart money has left the table. Since juniors have no operations, they aren't really affected by the price of gold in terms of cash flow and losing money. They are zombie companies living off off the fumes of their last foray into capital markets. So they can be juiced one way or the others by market makers.

      Take for instance TRX (Tanzanian Royalty Company)--it has no more than $3 million left in the bank (by some estimates closer to $1million) an administrative burn rate of $1 a quarter, no plan for funding, & no mine (thank god or else the cap ex requirements would sink it)). And yet it's not making new lows like the big miners (fresh new lows by AUY & KGC this morning--admittedly KGC is sinking because its Russian cash cow Kupol is in jeopardy). If you look at its largest institutional holders, they are DE Shaw and Goldman--I would guess because they hold positions for trading purposes only. When the money runs out, this junior will be toast.

      Delete
  5. EUR USD :
    I keep watching the 1.2730 level for the end of this week (close of the 2week-candle). The MACD in this time unit is meeting its propagation axis (blue line). If it bounces there, it usually means a bounce in prices as well --> pullback towards 1.3150 likely. If it doesn't, and if prices close under 1.27, or worse, under 1.2660 (green line, previous bottom horizontal), I see no serious obstacle before 1.22.

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

    ReplyDelete
    Replies
    1. Booom....Eur Usd through 1.2660 and now sub 1.2600...it's a free fall, just like a few years ago. With such volatility, a target of 1.22 is easy to consider. It's my target to get out of my short position now.

      Consequently, gold target 1180, silver target 16, ratio gold/silver >70 logical if we keep falling. What's the hurry to buy? On the contrary, if 1180 is being tested and fails to hold, it might even be time to add up to some short positions. This could turn into a new desperation move fed by bulls selling their long positions.

      Delete
  6. I have a remark : last time Euro Usd was headed towards 1.20, people were scared about Greece, then Spain... today it's about France. France can't be saved with a few tens of thousands euros. France's collapse means the collapse of the entire eurozone.
    I don't know if we'll stop at 1.20 this time.

    ReplyDelete
  7. Given this mornings early action where the Euro has given up 1.26 and gold taking a bit of a hit I think the news out of the ECB's soon to be announced action could be significant in the next few days.

    EUR 1.25 soon.

    ReplyDelete
  8. 1) @Peter, I've answered your question on the last blog's line.
    Short term, markets are more and more technically driven, and care less and less about "fundamentals". Markets have nothing to do with 20 years ago, due to the arrival of robots and giant hedge funds.

    2) GOLD.
    If 1180 is about to fail, then I thought about watching another Fibonacci ratio, which seems to be relevant. The ratio of the up move from 750 to 1920.
    We see that gold has been bouncing several times (close of candles) between the two fibonacci retracements 1210 and 1350.
    If valid, then 1210 should prove to be an important support zone, and if broken, if 1180 gives way, next fibo level would be in the 1030 area, which corresponds to a long term ex historical top which became a support.
    So once more, if 1180 breaks, then the 1030-1070 area is likely to be targetted.
    And a failure of 1210 would be one more defeat for the bulls.

    http://i59.tinypic.com/15eu1s6.jpg

    ReplyDelete
  9. Everything is fine in France...from a French TV point of view, lol.
    Everywhere else in the world, they know France, therefore Europe, therefore Euro, is in big trouble.

    http://i62.tinypic.com/2s9ordj.jpg

    ReplyDelete
  10. $1.18 ----$1.20 support goes back 10 years and one would think would hold for a good short covering bounce, but then again, in bear mkts, the surprises usually come pleasantly in the primary trend direction. Once this are is decisively broken, the whole, convoluted experiment comes into question and this thing is on its way to implosion, extinction and the ashcan of failed CB experiments.

    ReplyDelete
  11. Just came across this....

    September 30, 2014 7:57 AM

    Dollar Surges as Eurozone Inflation Sinks to Five-Year Low
    Pressure on ECB To Further Ease Monetary Policy

    By TOMMY STUBBINGTON

    The dollar continued to surge Tuesday, buoyed by a slump in the euro as eurozone inflation sank to a five-year low.
    The latest sign of sluggish price growth in the euro area is likely to crank up the pressure on the European Central Bank to further ease monetary policy, at a time when investors perceive that the U.S. Federal Reserve is edging toward raising interest rates.

    The widening gulf in monetary policy pushed the euro 0.9% lower against the buck to $1.2571, the lowest since September 2012.
    Analysts said the decline in the euro triggered broader dollar strength, with the greenback rising 0.3% against the yen and 0.5% against the British pound.
    "The dollar is catching a firm bid-tone on the back of weaker eurozone [data]," said currency analysts at RBC Capital Markets....(cont.)

    WSJ.com

    ReplyDelete
  12. I cannot believe gold is still this high with the dollar rising. I think today could be the 1200 break. A hard test of 1200 is long overdue. I am guessing the only thing holding it here is official intervention - i.e. a large sovereign on the bid. Perhaps China. There is no such bid on silver and it shows.

    copper getting close to breaking 3

    ReplyDelete
  13. Dan, your last paragraph was a size-splitter! :-)

    ReplyDelete
  14. russian ruble hits all time low..
    ..emerging market contagion or what! ?

    this may have helped gold go from 1204-1220, but probably shorts booking profits to go flat on quarter end.

    ReplyDelete
  15. 1210 is holding on gold. Keep your breath. Will it be salvation day for the gold bulls? :)

    ReplyDelete
    Replies
    1. MACD daily crossed its signal (bullish), while inf bollinger band near 1200 is reversing upwards. Not a bad time to have a pause in this bearish trend. That plus the 1210 support fibonacci, bulls have no excuse not to try a bounce now :)
      Go on, guys, I'm watching (with a stop loss above the ma20 but shhht...)

      Delete
  16. Bonds buh buh buh bad,bad to the bone:
    ...After taking SPX for 680bp in the first 6-mo of 2014, TLT has outperformed by another 440bp in 3Q.

    It's USDA quarterly stocks day - a day known for its surprises in recent years, but primary focus remains on big harvest.

    bubblin' crude CL did not get thru it's 50-day MA. NDX did not get thru it's 20-day.

    window dress by the record long non-commercials takes DX to 4 yr high.

    cheers!

    ReplyDelete
  17. Still very cautious about the euro.
    I keep my small last 1/3 of my short position, but I don't add up to it.
    The inf bollinger band is simply on the way from now on.
    Last times we reached it, it rapidly generated a bounce.
    I'm not sure we can go bearish that fast and easily on the monthly time unit, too. I can't help thinking that a bounce is likely in october, maybe towards 1.3150.

    Gold may bounce the same way, fortunately the ma20 daily is now under 1240, securing my trade.

    ReplyDelete
  18. Looks like the evil Cartel just dumped massive numbers of BUY orders on GC around 7AM and 7:40AM! This is just outrageous manipulation! They're not even trying to get a good price--they're only concerned with getting the price of gold as HIGH as their evil machinations can drive it!

    Meanwhile, the CFTC just sits back, and does NOTHING, letting these criminals drive the price of gold up at will! Let's just hope that the strong dollar (the only standing in the way of these thieves) will be enough to stop the unconscionable rise in the price of gold!!!

    ReplyDelete
  19. the only thing that really is in backwardation is the clown James Turk and his thought process. what a hall of fame donkey !

    ReplyDelete
    Replies
    1. Steve, that is very funny: James Turk is in backwardation! What I would like to know is your opinion on whether he does it intentionally and maliciously, knowing full well gold is weak, or whether he is just a gibbering idiot. If it is the latter he needs to be coaxed gently into a padded cell; but if it is the former he might need a horse whipping. Dan must have many treasured memories of these people, but he is not letting on, except in the most general terms.

      Delete
  20. Hold on to your hats, dollar has gone bananas, and due for a sharp fall. Last splutter of S&P for September. October gloom to follow and gold jerks upwards. How do I know this? I crossed Madame Ruby's palm with a gold coin and she told me so.

    ReplyDelete
  21. Wow! Gold about to crack 1200. At 1208. Commods.getting smoked.

    ReplyDelete
    Replies
    1. Wow! Real estate going next with the strong dollar. foreigners will begin to pull out. Low end will get laid waste once again. All those bubble areas again.

      Delete
    2. Au/Ag ratio is 71. In times of stress gold shines. Not like this since 2008/2009.

      Delete
  22. The Lone Ranger strongly recommends Hi! Ho! Silver at $17.

    ReplyDelete
  23. Let's be fair. It is not just gold and silver pundits that need to be condemned, but all snake oil salesmen in all markets. KWN and crowd had their day of glory when they could do no wrong, but are now in the dog box, though what is wicked about them is that there is no sense of contrition.

    An accolade to Dan who is always cautious and never presumptuous, providing wise guidelines only in a sense of humility, which he acquired over many years of experience. It amazes me that he runs this website for no personal gain, but just to help us poor idiots, who might otherwise get into deep trouble.

    ReplyDelete

Note: Only a member of this blog may post a comment.