Unlike 2013, the USDA threw no big surprises at the markets today. Acres were within estimates, a little higher for beans and a little lower for corn, which spurred CZ-SX spreading . July/Nov old crop new crop went from its pivot at 2.00 out to 2.46. It seems determined to push out towards 3.00 over time.
Funds are long 180 beans, 250 corn and 50 wheat , and are in the driver seat.
I personally had thought there was a 70 percent chance of a down side flush on bearish USDA, but carry out for corn dropped to 7.000 billion and stayed at 998 or so for beans (basis may)
We end the month with CZ above its 200 day moving average and the funds in complete control of this grain market.
We are shaping up for a trade like 2010 , or possibly 2012, where the money over the next 6 months will be made by buying dips.
If we can get SX above 12.00, we might get even more interest in longer-term capital getting long grains as a macro play.
Bottom line. Being short for more than a one or two day scalp does not seem to be a good long term play this year.
If you are e producer, you are being blessed with a great 3 month rally, which has given you a return to prices not seen in the last 6-months. You have a lot to be thankful for. I’d start with the spec funds, and included the USDA in your list of things a bull should be thankful for this evening.
CER