Kleist Comments

MORNING GRAINS 3/5/14
MORNING GRAINS 3/5/14

Corn:

Exports: None Visible.

Comments: Yesterday I recalled a trip back into time to the 2007-2008 grain epoch that was highlighted by continuous, heavy fund buying. That in turn sharply exaggerated grain prices. Are we there now? No. A mini-me perhaps. But the lesson was well taken: “markets can stay irrational far longer than you or I can stay solvent”. Maybe with the last couple of years of “normal” futures markets one becomes complacent.

Deliveries 304, Term (commercial) sops 66 of them, rest street; one forecaster says next 3-4 weeks will see waves of moisture; USDA’s Chief Economist said: world grain markets may be acting ‘prematurely’ over the Ukraine (situation), he sees no evidence of a disturbed grain trade from the Black Sea (then again, he might be like a major league baseball umpire!), on the other side he sees China’s issues with the GMO deal as ‘temporary’ (now he has 20/20 vision!); open interest rose 13,200 amid heavy volume. May corn over its 200-day m/a at $4.79-1/2 and now talk is, obviously $5.00. As a technician as is well bullishly, if not a bit overbought; as a fundamentalist I am reminded of an old friend who was a cash soybean trader as saying “standing aside IS a position”.

SOYBEANS:

Exports: China cancels 245,000t old crop.

Comments: Rascally Chinese pick their spots eh? Will it matter? It should but perhaps not immediately; can beans top while corn and wheat perhaps do not? As Tom Jones would say “It’s not unusual”; one interesting Ukraine problem for India: Ukraine the world’s largest sunflower oil producer and India, the major importer of such, reports delayed shipments; del. 12; meal 1; soyoil 225; open interest fell 4,200 led by H/K off 5300 amid light volume….. funds are busy elsewhere (perhaps exiting longs here and into corn?); top still in play, close under $14.00 would be a solid bear indicator obviously)

Wheat:

Exports: None Visible.

Comments: Ukraine exports are not effected materially by the Russian invasion yet, or so says the USDA (see corn above). Most of this rally has been shortcovering and yesterday another drop of 4,300 in open interest led by May now at off 4,700 amid good volume; May wheat over its 100-day m/a and its 200-day at $6.65-1/2; like the corn, I am closet bear here. As a technician all is generally well.

Kleist Comments

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

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