"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


Monday, June 30, 2014

Trader Dan Grain Index at 5 Month Low

Today's USDA reports really did a number on this index that I have created for my own analysis purposes. The unexpected data showed supply outrunning current expected levels of demand and forced the market to adjust to the new set of fundamentals.

If you note the index, it is at a 5 month low!

A couple of things to note here that I was unable to get to this morning amidst the hustle and bustle of trading activity. First, corn demand has fallen off because feed demand is falling off. The reason is because we now know that there are less piggy mouths around to feed than previously expected. Also, cattle numbers are well off last year's levels as well. Less animals to feed means less corn demand.

Secondly, even though planted acreage estimates for corn are lower than last year, traders are expected the harvested crop to actually come in larger than last year. The reason is because we have thus far had nearly ideal growing conditions. The crop looks terrific at this point as it enters the key pollination stage and for now, forecasts look benign.

Wheat prices are low but global supplies are ample and US prices have had to respond to increased competition from other nation suppliers.

I do want to add another note here - today is both the end of the month and the end of the quarter. End of the month positioning is bad enough but throw in a good dose of end of the quarter book squaring, and all manner of strange price moves can be seen.


  1. Good writing as usual Dan. Wonder how many of your readers can remember $4 beans and $2 corn???

    1. Steve;

      I wonder how many can remember a 10 cent limit!

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    1. Thanks Dan.
      It's good to hear the US is expecting a bumper crop of corn this year so far.
      A bad US corn harvest is bad for the rest of the world. I think the US supplies around 40% of all annual corn to the world if I'm not mistaken.

  3. Just out....300 more troops headed towards Baghdad.
    Focusing on Baghdad International Airport supposedly.

    That scenario I mentioned 3 weeks ago about ISIS gaining control of civilian airliners in Iraq can't be overlooked.
    The additional deployment and "securing" of the airport means the US is seeking to control the largest airfield in the area (as well as any former US airfield/base).
    The Iranians or Russians can't be real happy about a US military controlled major airport in Iraq's capital that they probably hoped they'd have easy access to and fro.
    The conditions on the ground around Baghdad and the Green Zone are only going to become multi-cultural from a military forces standpoint that also includes al-Sadr's militia army.
    The longer Maliki stays in office the longer Iran and Russia are able to cozy up to Iraq. Once Maliki is out of the way (one way or another) the power paradigm changes quickly and dramatically.

    Maliki seems vulnerable in an encircled capital by virtue of what and who he represents. His presence represents a roadblock to the West.
    Once he falls or is constitutionally replaced the West will fill the vaccuum again.
    How Iran or Russia reacts to that remains to be seen.

  4. Markets couldn't care less, as Fed has their back whatever.

    There is a rising tide of immigration flooding into Europe from war ravaged Africa and Arabia all looking for better safer richer prospects. US has same issue with central America & soon Argentina no doubt. As ever the West will be clueless & will only look to the end of their nosebag for solutions. Where have all the statesmen gone? All we have now are demagogues like the brothers Gracchi of Rome.

    Indeed the elites couldn't care less about the plight of Capitalism which gave them their status. This will be their and our downfall as the plebs bay for more.

    Bumper crops of GM corn to rot you from the inside out. Much like the Fed.

    Just buy any dip. Borrow at zirp and go long. No pain only gain.

  5. Yep, exactly.

    Any time a specific commodity gets out of hand, it is instantly crushed.

    Part of the Fed's "Price Stability" mandate.

    What is amazing is that this time grains collapsed under their own weight, with no assistance by Fed Words whatsoever.

    Looks to me like the commodities may be headed back down and the consumer will enjoy a "tax cut" once again.

    Except gold will outperform, only because so many guys are still short.

    And as shown by Dan's copper analysis earlier, the economy will be booming soon.

    Despite the KWN news of a "Global Economic Meltdown", complete with some hooker wearing red lipstick performing some type of oral act on an apple. LOL....

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    1. you need to leave shikah verma parasite

    2. CAPITALSTARS is a shitty website with lousy forecasts feeding on number of visitors and viewed pages. It's maintained somewhere in India where the salary cost for such spammers as Shikah is worth asking them to spam every website seeking for idiots who will click on their link.
      Indeed, it is cheaper than advertising, and noone in his right mind would waste time watching another Bullshit financial news forecast website such as Capital Stars.
      It is funny they dare advertising here, because all they achieve is to show the difference of quality between Dan and this forum and BS forecast website such as Capital Stars.
      Let's remember together this name : Capital Stars.
      A website of fraudsters who don't mind posting here uninvited to try to advertise for their stupid cheap content website.
      From that initial policy, what does it tell to readers about the quality of their forecast? lool.
      CAPITAL STARS, the website which is shooting itself in the feet by posting here.
      Hey Shikah Donk, noone is going to click on your link, so you won't get your stupid incentive.
      I guess some curious will unfortunately go an check your stupid website and waste their time there, encouraging you to keep spamming our nice forum.
      So I will post this again every time you do it.
      To all readers, please don't encourage those assholes.
      Don't click on CAPITAL STARS link.
      Instead, make sure you remember the name as one of the Top Fraud website for dummies.
      Regards, Shikah and good luck.

  7. Hello,

    My small update about gold for end S1 2014.
    Short term, we are still in this resistance at 1325 with intraday attacks up to previous range top at 1330 $. Gold still didn't manage to pass this resistance but is working at it.
    On the 2 months / 2 weeks / 2day charts, I see a resistance area next in the 1360 area.


    If we make it through it, then it seems 1410 is the next strong resistance area, via my quarter / month / week chart.

    I'll be monitoring on the daily time unit what happens to gold prices while the CDur is heading back down to its lows. If prices keep holding ground as they are now, it may be pretty positive for a potential new attack of 1325-1330 and a try towards 1360.
    Let's see.
    For now, I "unfortunately" entered the market long at 1326 on a stop order, which probably should have been put near 1335 instead. Anyhow, as the breakthrough was not confirmed and gold prices are stalling once more, I'm putting a stop loss pretty close to my entry level, near 1320 actually, as I can't feel very optimistic about that one :). If I were a full time trader, I would probably have been able to buy at 1310 on the support of the range of the 4 hours time unit, when the MACD was crossing up again, confirmed by the 1 hour...but I'm not a full time trader, and that's where my entry points become fragile :)


    Have a nice week,

    1. I put a buy stop at 1326 in order not to miss a possible rallye towards 1360 area, on the daily time scale, as I wasn't all the time behind my screen. Now the not so good scenario happened : a head fake up on the 1 hour scale got me in, but prices corrected down immediately and we are still just in the resistance area.
      So I'm on the defensive now, with an impulsion up which is over, hoping that prices will resist laterally before a new move upwards.
      Bollinger bands on the 4hour are going up, and on the 1hour, damn, the bollinger are so close that it tells it all about the lack of intraday volatility today...the inf bollinger is heading upwards at 1324 already, and prices are holding their ground, so a little hope remains for my long position, but for sure my stop loss must be respected, as this would be also a great spot for gold to reverse back towards 1300. After today's top, the high of the range on the daily time unit clearly appears at 1330, not 1325.

  8. Silver.

    We are still under a level on the OBVD which I think is important. Going above this level may generate more short covering.
    The CDur is now heading down on the daily time unit, i.e the last impulsion up is over, prices may go down or keep lateralizing just as they do now...if they can maintain this level until the CDur is back on its low area, it could be a good omen, as when Cdur heads back up again, prices may follow.


  9. I'm glad there's no chance of Dan allowing this trading blog into becoming a sometimes Ladies Home Journal.

    It just keeps getting weirder out there in the PM blogosphere.

  10. Looks like new highs across the board for many stock indexes.

    "Massive Worldwide Global Economic Breakdown" nowhere in sight.

    Finacials are outperforming today, led by credit card stocks.

    The "Terminator" silver dude is once again riding his silver surfboard into Outer Space.

    KWN is getting weirder and weirder and more disconnected from reality.

    1. Looks like XLE is building a good resurgence since getting destroyed. The bull in energy is just getting underway evidenced by the perfect 45 degree angled chart line since mid 2012 and setting up for a mania phase.

      My bold prediction is oil reaches $175+ by 2015.75 as the US booms into next year. And natural gas will make a good kicking card to boot.

      Just look at junior O&G plays in Canada like DEE, PPY and GXE all doubled since January this year. These will be the 10 baggers by the time this is said and done like the junior gold miners were from 2008 to 2011.

      Mark - good to see the flavor of your humorous posts hasn't changed since becoming a gold bull. I guess KWN will have to move to becoming a circus freak show as a niche to keep attracting viewers.

    2. Mineset postings today from Simon Black and Joseph P Farrell and Greg Hunter who cannot interview anyone without pursuing the "should I buy gold to protect myself" question like a madman.

      Jim isnt 50.000 dollar gold crazy, he just knows that this is the crowd that still can be sheered.

  11. Rigged market always falls... I mean... at the END..so be careful

  12. Wheat getting completely destroyed as the Russell 2000, XRT, and XLY flirt once again with all time record highs.

    The consumer has never been stronger, never been richer, as input costs continue to collapse as he enjoys even greater amount of purchasing power.

    The NY Composite has now broken out to new highs after spending 9 trading days above the 1 to 1 extension highs off the 2011 lows.

    That means the next target is a 1.38x extension, which is another 1,650 points higher.

    The Global Equities Boom continues, thanks to the most wildly successful central banking strategy ever conceived.

  13. Wonder if Eric King would ever have the nerve to interview the CEO of Limited Brands, as that stock is up 2.5% and breaking out of a 6 month consolidation.

    Eric is fond of putting up exotic girls on his website, I figured that Victoria's Secret sales are booming, he might as well interview the head of LB to see how business is going these days.


  14. Tempting to go long wheat at these levels. Support possible at 577.

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