"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


Tuesday, October 14, 2014

Harvest Running Behind the Average Pace

This is not news for any grain trader who has been paying attention for the last few weeks however. Wet weather has prevented farmers from getting into the fields as quickly as they would like as has the lagging maturity of the crops in general but today's report just confirms that a very big crop is still out there.

Corn ratings held steady at 74% rated Good/Excellent with Beans rating 72% Good/Excellent so the crops remain in outstanding condition in general. These conditions numbers however are soon, if not already, going to lose the interest of traders as it will be harvest completion % that will be the focus and that means weather. Also, attention will shift to weather down in S. America as it is planting season in the S. Hemisphere.

There are some reports that the Argentinian government is getting ticked off at grain farmers down there, many whom are not selling their harvest from last year because of the depreciating peso. They would rather hold the "hard asset" than sell it and that has the government riled because it wants to see the sales so that it can tax them and generate some revenue.

On the maturity front, corn is now at 87% mature compared to the 5 year average of 89%. Illinois and Indiana are actually ahead of the 5 year average now on maturity while Iowa, Minnesota, Wisconsin and the Dakotas are behind.

Corn harvest is lagging but that was expected with the trade coming in a bit on the low side of actual harvest numbers when it came to pre-report estimates. Currently 24% of the crop is harvested compared to the 5 year average of 43%. That is why the recent storm was a good excuse for those gunning for stops to run the stops.

Someone ran a huge buy stop order after $3.50 and that got the ball rolling big time in the corn. I saw the violent price spike higher and figured someone's stop got picked. That is how the sharks operate.

Apparently an awful lot of call option writers got obliterated and were forced to buy futures to try to stem their bleeding.

On the soybeans - the national crop average has caught up with the 5-year average of 91% when it comes to dropping leaves.

Harvest is at 40% nationally compared to the 5-year average of 53%. That is a bit better than the pre-report averages. The best I saw was a 32% complete so those bidding up the beans for harvest lagging reasons may have lost a bit of ammunition based on this. We'll see however as there is now a huge "money game" taking place because of forced liquidation of short positions over margin calls that has been induced.

We have quite a few "bottom callers" in the grains right now on account of the technical price action of the last two days. It will be interesting to see how the competing technicals fare against the bearish fundamentals. Technicals win in the short term and thus MUST be respected but fundamentals always assert themselves but one does not know exactly when!

I can only say that I cannot remember seeing corns or beans bottoming with this low percentage of the harvest complete. If the forecasts hold, harvest progress should begin gathering some real momentum later this week. Northwest areas probably are already seeing a lot of combines running. I expect that to continue to the East as the soils dry out from West to East this week. low lying areas will have some issues due to the large amounts of rain where the impact from the recent weather system was felt.

That should lead to some strong farmer pricing of grain that is being harvested as some farmers have been fervently hoping for some sort of rally in prices that they could use to price grain. Well, thanks to the antics of some big specs, they now have that opportunity. whether they take advantage of it remains to be seen however. Many farmers tend to get bulled up quite quickly whenever some of these violent shortcovering rallies take place. The problem with short squeezes is that they can end just as quickly as they started.

Quick comment on the livestock - cattle got hit hard once again with feeders locking limit down. Those who were squeezing corn prices higher managed to obliterate the "math" for those paying these recent sky-high prices for replacement calves.

Hogs are hanging in there better right now due to the very deep discount of the now front-month December contract to the current lean hog index. The October contract expired today at 109.525 with the index at 109.70. The December closed today at 94.925 although it was smacked very hard later in the afternoon session as the pork collapsed in price today.

Falling crude oil prices are flashing quite a warning signal that the global and domestic economy continues to slow. Stocks rebounded a bit today but after being beaten down so hard the last few sessions, I guess that should not come as a surprise. Still the bounce looks tepid. In an environment such as this, with the GSCI making once more a brand new 49 month low, it does make one wonder why some entities are intent on chasing grain prices so steeply higher.

Lastly, unleaded gasoline has just plumbed more new lows today. One begins to suspect that ethanol distillers are going to have some trouble!

Incidentally, interest rates on the long end of the curve continue to plummet indicating the building deflationary pressures. Yield closed at 2.206%, the lowest in 16 months!

The Dollar remains stuck right smack dab in the middle of support near 85 and resistance near 87, basis USDX.


  1. Funds bought an estimated net 15,000 beans, 7,000 meal, and 11,000 corn.

    Tomorrow will be NOPA crush with market looking for September crush to come
    in around 103 million vs. 110.6 million last month,108.7 million last year. FSA will release its latest certified planted acreage report in the morning. Market action today would suggest trade is looking for
    another cut in corn and bean planted acres.

    yeah 53% normal for bean harvest, transcribed it wrong below at 50%.
    sorrrrrrrry :)

    lotta DX top callers out there now, but gotta say eur/usd had 2 great sales at the 20-dma touch, one late last nite and the other last weds.

    sugar is overbought, waiting for a pullback. cocoa has ebola and ivory coast border clashes or what not, popped today off support.

    ebola- might be interesting to watch restaurant stocks, if they follow airlines and hotels, could affect livestock.


  2. no worse fate than being seated next to you at a dinner party, Indian or Pakistani Bot, 77 miserable bot of basement fame.

  3. Current area on WTI crude oil interesting for a potential bounce, down to 80 $.
    I can't monitor carefully anymore, but I put a buy order a bit above 80 $ in case.

  4. crude will not go up until elections are over. Sub 80 here we come.

  5. Do not know if anybody still checks out kwn, but today there is of course a bullish interview with Ron Rosen. The only thing is, according to how I read charts, his quarterly gold chart is quite ominous and he fails to point out the possible downside. To wit, I see a flagpole and pennant and if the old 1180 lows are broken, textbook TA tells you the objective is $600, plain and simple. Nothing else here, move along.

    1. Ron Rosen another jerk.

      Btw, im awaiting the long anticipated first trx gold poor supposed to happen in september as promised before during and after the 2014 AGM

      After 2013 AGM promises of production on multiple properties supposed to happen in 2013.

      After talk that "we are a producing company now" during the 2012 AGM complete with fotos of vicious looking guards at kigosi guarding the bunker with gold.

      After promises of production in 30 months on buckreef made during the 2011 AGM I would be flabbergasted to see Jim actually deliver SOMETHING.

      Its all just lies.

  6. PCB and Lan; what are your thoughts on K. Weiner's latest thoughts?

  7. Oct FSA data showed modest additional acreage certified, but still a million acres or so still at question for both corn, soybeans.

    ags a bit of selling into the pause.. finally other asset classes tanking had an effect.

    Midwest & Brazil weather is also turning bearish for corn, soybeans;

    welcome welcome welcome to the machine:
    Faster than you can even register the ladder moving, HFT is slamming 6k E-Mini S&P through 3 handles and does it 3 times - good luck humans!

    buh buh buh bunds led the way early hitting record low yield, now weak 8:30 data pushes ZB +2 and TY(ZN) +1.5

  8. Commodity & equity markets under pressure this AM with economic data & Ebola fears weighing on Wall Street. usd/jpy hit 106.19 risk off!

    NQ 10% correction would be just above 3700. ...NDX 200-dma at 3763 based on futs will be close to a test after open.

    blurb: March Feeders win the race! LIMIT DOWNNN 2 Days in a row!

  9. Open Interest changes to grains: corn -4,191 soybeans -9,950 wheat +571 soybean meal +2,797 soybean oil +512..

    that's short covering! also they did that rock it up game into oct. expiration in soymeal. meal is the 'crush' that really moves the beans.

    fed beige book this afternoon: DX bears are really growling now, can eur/usd finally stay above it's 20-day MA. euro also has former important lows at 1.2745-55 ish

  10. Van Eck increased TRX holdings by 7,000,000 shares ! pretty much everything they dumped last year ... Total holdings in GDX is zero , but now in GDXJ , total holdings amount to a cool 14.9 Million shares ... that is 7.9 Million shares more than at the end of last year , something going on there

    1. What is going in is the capitalization if the gdx went up to compensare from trx being booted from the gdx hence gdxj bought 7 mill8on shares.

      Otherwise trx eould be trading at fundamental value, which is approximately zero now.

      Question for anon. Trx runs out the last of the 45 million dollar Jim managed to raise in 2010 and 2011 before the 2015 march agm

      What do you think happens then?

    2. Jasper , I refuse to communicate to trash like you after you insulted me a while back ... I told you to completely ignore me , if you don't like what I post , fine , but please do not address me directly . I give people one chance , and one only . I despise people insulting each other over the net . You go your way , I will go mine . If you have questions look it up in wikipedia , or call your broker .

    3. Answer you get to buy the dilution so that Jim can pay his board of criminals 250.000 to 50.000 salaries.

      Insulting you would be like insulting an ostrich. Impossibe your head is too firm up there to allow the sound if reason or facts to reach your ears.

      Jim sure is mining gold among investors.

    4. The methods may be different but it doesn't sound much different than the explosion in stock buybacks by the darlings of the MSM. I bet uncle Warren is proud of his wonderful corporations using cheap debt to help fuel a new wall street bubble. Dream on!

  11. wow machines keep on running it euro over 1.2850, gold silver ZB +4... nice the bidders on 17.00 silver you've got .65.

    the old range in gold was 1245ish, so if DX 'regains the range' at 85.00 and gold drops below 1241 it would be a tell.

    if ags end red they'll say 'harvest hedging begins'


  12. Sure wish I would've trusted my gut and put that short trade on the markets 2 weeks ago.

    Oh well, nothing ventured/nothing gained...or lost! :-)

  13. The SPX fun is almost over. We got our little trip down at the open to "go negative for the year"--if you blinked, you missed it. Reminds me of a three year old running down to the surf at the beach, then running back up to the sand...

    This is market theatre, folks. If you haven't made a buy list to finish out the year, best get to it.

    I'm a little sorry CL didn't get below 80--we had a pretty good little crash last night, but I'm not sure it's in the cards anymore. We'll see.


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  15. Hubert, did your WTI buy order get picked up? If so, bravo!

    1. yes it did, 80.20.
      But I'm nearly totally blind and crazy to do this with so little time available what's going on.
      Only NOW am I checking what happened yesterday.
      Stop loss 79, target 83+.
      The wise way is to watch regularly the 4h or 1h candles and be confirmed the support area before entering the market. Same for going out.
      What I'm doing now is, if not crazy, not professional.
      But yeah, it seems that the support area given by the Bollinger bands was, once more, correct.


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