Neutral to bearish for corn. Very bearish for wheat, with the world and the US awash in wheat. Pretty friendly for Soybeans.
I think Thursday and Friday will be more important than today’s action. Quite frankly the volume today was less than I had expected.
On a bearish note, China has retaliated for Currency Tariff bill by fixing the yuan. Is this the start of a trade war? I hope not. History shows that trade wars generally lead to hot wars. Not a particularly enticing thought to imagine.
It certainly would be negative for commodity prices here in the USA. Take away Chinese demands for bean and corn and watch the commodity bubble deflate like a cartoon character. Not very likely, but a scary thought, just the same. (And we are 2 weeks away from Halloween)
Speaking of scary, I am watching CNBC crow about the Dow being in positive territory once again for 2011. Perhaps they forgot that May 2011, just 5 months ago, the Dow was at a 3 1/2 year high? 12,873 in Dow futures 12,876 in Dow Cash… Just last week we were at 10,400, a One year Low. From 10,400 to today’s high at 11,625 that’s a 1,225pt rally. We are 1/2 way between the 3 year high and the 1-year low— And CNBC is celebrating?? HMM… 11,852 is the next upside for the Dow. That’s a 62% retracement and puts us 1,000 points away from the May high… At that point I think we have a come to Jesus move for the Dow.. Either the bears get their heads handed to them on a panic rally through the rest of the year, or the bulls get sucked into a head fake sucker rally, which, if they buy it, could be the cherry on the top of a 2000 point trading range chopp fest.
One thing for certain, in my opinion, “Individual investors do not exist. Its money managers and algorithms pushing this market around. The buy and sell decisions are pre-loaded and the computers pull the trigger.
There is a quaint idea people have of men and women screaming orders over a phone line or multiple phone lines. That is nonsense. The computers are in charge. The person who programed the computer might as well be applying game theory. An infinite number of end game scenarios are pre programmed into the black box. They program the box, switch it on and then read the paper.
Of course, that’s a very over simplified explanation of what’s going on, but that’s what i think, in a nut shell.
That is all
CER