Overnight we received surprising export demand numbers for wheat at 767MM tons. Corn and Beans were rather tepid with 522 and 451 respectively… However, a cheaper dollar, as I have written before, means the world is shopping at KMart, and our grains are a blue light special, which will mean increased demand… Prices will rally until the supply/demand curve is adjusted for the scenario of a US Dollar Index melting to new lows.
Currently WZ is up 12 cents, CZ is up 8 cents and Nov Beans blew up 24 cents, slicing through the 935 level, posting an inter day high so far of 938…
The beans are under threat of 2 days of heavy rain entering the forecast, while the threat of a hard freeze Sunday and or Monday weighs on the corn, which possibility of a drop in yields if the freeze is harsh enough…
Combine that with the USDA numbers coming out tomorrow, fueling shorts to cover bad positions, and I think that a spike up to the 945 to 950 level is possible..
Tomorrow and then Monday, will tell if this is a head fake or a new leg up in prices..
The bullish factors remain, 1) the U.S dollar weakness 2) Re balancing by the large Index funds on the horizon 3) weather concerns which may impact yields…
All in all, though, this looks like a day where we will grind higher…
A new high in gold would certainly pull up the rest of the markets in sympathy..
In the stock Index’s we have seen fresh new buying.. with DJZ at 9755 level, I can definitely see a test of the 10000 level on the horizon, which most likely will be met with a wave of selling, a correction and then perhaps a rally higher..
Earning season is currently underway, and if we get surprisingly good data from any of the 30 Dow components, it will fan the bulls appetites, and force the shorts to cover… again, driving the market higher… Alcoa came out with better than expected earnings, and for the time being, until next month’s unemployment data on the first Friday of November, the markets will be gyrating with the earnings reports..
Remember that it was just last week that the Jobless claims came out at 263k instead of 200k, and the stock indexes snapped lower, with Thu Dow going down to the 9350 level and the SPZ trading down to 1012… Currently we are 400 points higher in the Dow and 40+ handles higher in the S&P’s..
Go back and look at my blog that day, and you’ll see that I suspected a lot of folks sold it in the hole that day, and have been gradually flipping the other way now, in an attempt to get right with these markets…
If you have any specific questions, feel free to leave question or comment.
Good Trading