Kleist Comments

MORNING GRAINS 1/6/14
MORNING GRAINS 1/6/14

Corn:

Exports: Sold Mexico 110,600t.

Comments: Oh baby it’s cold outside! As such, trade talk is that the feed usage will blossom and take corn higher. Hope so. Didn’t we just make new contract lows last week? Not trying to dampen bull-enthusiasm but we’ve seen these ‘mini-reversals’ before. However, I’ll give it this technically: Friday’s reversal was accompanied by open interest rising 13,200! amid light/moderate volume; the C-O-T report: bit strange one in that commercials covered twice as many longs as shorts and funds covered a bunch of shorts (index funds net long liquidation). It would have been easier to read had Friday’s open interest been off sharply. As it is, new buyers (and sellers) were certainly aggressive with new buyers having an edge going home. This first full week of the new year might be telling. We need to prove the lows are in of course and then there’s that pesky USDA S/D report Friday. Nearby resistance $4.27 (10-day)-$4.29-1/4 (20-day), close over turns to neutral near term.

SOYBEANS:

Exports: None Visible.

Comments: More meal usage during the record low temps about the only headlines around. As an aside, thought this article was interesting: Big Swiss Bank says it sees a $10bln. loss due to the value of its GOLD HOLDINGS and will not issue a dividend for the first time in 115 years, article also said any gold bought after 2010 is in the ‘loss zone’. Does it mean that money will move to other commodities? Or mean large funds are nursing big paper losses and will be ultra-conservative in what they buy? Open interest fell 8,200 led by Jan./Mch. off 12,000 amid moderate/light volume; C-O-T report: leaned neutral (and curious); March’s lows last week at $12.65-12.62 important for the recovery to hold, obviously; to suggest the low is in for now, need to clear the major m/a’s at $12.91-1/2-12.95-1/4. Need to tilt negative here around $12.85-12.90 then.

Wheat:

Exports: Sold Unknown 160,000t 2014-2015.

Comments: Demand might have popped up as March dipped $6.00 again late last week as indicated by the weekend sales. Talk of freeze on HRW not the likely the real cause of the rally though it fills in the blanks to some. But is it a bottom maker? The rally was accompanied by a strong drop in open interest off 4,800 led by March off 6,100 amid moderate volume. C-O-T report: commercials now about net even, that and rest of the report all-in-all leaned somewhat bullishly. March needs to overcome “meaningful” resistance at $6.12-6.20 (inside that $6.18 20-day).

Late: report that Iowa paid $140.00 for cattle Friday, volume unsure.

Kleist Comments

This is John Kleist, of Kleist Ag Consulting.
Questions? Email me: johnwkleist@sbcglobal.net

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