Market Monitor

By Marlin Clark

 

Wild and wooly market hard to track

In the old cowboy song, "I'm wild and wooly and full of fleas, and hard to curry below the knees…" That pretty well describes the Chicago Board of Trade recently. The wheat rally which has driven this market stuttered overnight going into Friday, then staggered and collapsed Friday. The result was a $1.20 turnaround in a few hours, and less hair on the head of every trader following these markets.

September wheat futures were up as high as 60 cents in the overnight, the daily limit. When trading opened Friday morning they quickly went from up 30-something to down 35, then slid on down to minus 60 cents. Since then they have traded up and down a little, but as this is written before the morning open Tuesday we have September futures at 7.04-1/4, well off the 8.41 high of the Thursday-Friday night session.

So, the party appears to be over, or is it? Is this just the break to get new buyers in, or get the old to return? Was this just serious profit taking? All this remains to be seen, as the stomach turns.

The thinking on the way up was that the wheat was pulling along the corn and beans. Not so, if you watch what has happened since the wheat break. Corn and beans have held most of their gains, until a significant break overnight going into Tuesday. As this is written, the corn is off six cents, and November soybeans are down 12 cents.

Farmers who were smiling briefly over spotty rains ten days ago are back worrying about crops. There is still a long way to go to make the near-record crops traders have plugged into projections. Does that mean that this concern is already expressed in the supported prices that wheat dragged up? Do we stay near the top on weather concerns? Do we break as we trade the last production reports? Do we make new highs on hot and dry weather?

Some or all or none of these things will happen, and that is as definitive as I can get! It's like answering a question with, "yes, no, or maybe."

Looking at the prices, September corn futures had the big low of 3.33-1/4 the end of June. We had a July 15^th high of 3.97-3/4, then a July 26^th low of 3.61-3/4. Thursday the high was all the way up to 4.25, on a daily range that day of the 30-cent limit. We are now at 3.97.

November soybeans had the big low July 1^st, then climbed in steady increments to the Thursday high at 10.49, up 1.55. We have eased off 26 cents to 10.23.

September wheat had a June 10^th low of 4.43-1/2, and a high of 8.41 on Friday. Just that fast we are at 7.04-1/4.

The end of that cowboy song is, "I'm a she-wolf from Cripple Creek, and it's my night to howl!"

There will be a lot of howling before this summer's grain markets are done.

Marlin Clark trades producer and elevator grain for Keystone Commodities from an office near Andover, Ohio. He welcomes your comments at 866-293-4433.