Grain traders: Are you prepared for the Jan. 12 WASDE report?
Last week, March soybeans opened the week at 13.96 and closed the week at 13.65. Technically, OI dropped and ADX showed a strong trend, but it is weakening. MACD crossed down below the signal line. Stochastics have corrected out of overbought territory and are bearish. The commercials went from a 52-week extreme low of -203,215 net short contracts last week to -192,117 net short this week.
In March corn, the market opened last week at 6.26¼ and closed the week at 5.95. We have rising OI and ADX is showing a strong trend that is weakening. Like beans, MACD has crossed down and stochastics corrected out of overbought territory and are now bearish. The commercials last week were in a 52-week extreme net short position of -394,553 contracts; this week they were net short -366,819 contracts.
March wheat opened last week at 7.93½ and closed the week at 7.74. In technicals, we had a slight decrease in OI and ADX is showing no/weak trend. MACD crossed down and stochastic are midrange and bearish. Commercials went from -11,689 net short to -11,350 net short this past week.
Proceed to Page 2 for the latest COT data...
COT Data
Please, if you have not done so already, mark on your calendar that on Wednesday, Jan. 12 this week, at 8:30 a.m. EST the first World Ag Supply and Demand Report (WASDE) will be released for 2011. The last two years this report was bearish grains and the markets responded accordingly. While I am a technical trader, make sure you are aware of what this report can do to the grain markets. See the charts below for an excellent technical view. For a chart view of the Disaggregated COT report, go to www.TrendinFutures.com. Have a prosperous trading week.
| Commodity |
12-mo low |
12-mo hi |
7-Jan |
3-Jan |
| Cattle (feed) |
-2,917 |
7,100 |
1,322 |
2,534 |
| Cattle (live) |
-73,179 |
-18,177 |
-39,987 |
-42,259 |
| Hogs |
-38,039 |
836 |
-11,171 |
-9,201 |
| Corn |
-394,553 |
119,389 |
-366,819 |
-394,553 |
| Oats |
-6,317 |
829 |
-6,317 |
-5,822 |
| Soybeans |
-203,215 |
56,797 |
-192,117 |
-203,215 |
| Soybean meal |
-90,487 |
-6,350 |
-77,247 |
-73,749 |
| Soybean oil |
-111,786 |
32,394 |
-92,620 |
-87,730 |
| Wheat |
-16,413 |
82,654 |
-11,350 |
-11,689 |
| Orange juice |
-19,355 |
-6,588 |
-17,723 |
-16,635 |
| Coffee |
-47,729 |
-4,637 |
-40,658 |
-41,500 |
| Cocoa |
-49,897 |
8,586 |
-18,881 |
-18,265 |
| Sugar |
-241,259 |
-104,983 |
-206,006 |
-216,482 |
| Cotton |
-69,857 |
-12,970 |
-37,450 |
-37,600 |
| British pound |
-31,274 |
97,211 |
21,717 |
20,420 |
| Canada dollar |
-105,107 |
-13,109 |
-65,251 |
-61,599 |
| Euro FX |
-62,835 |
124,494 |
24,885 |
27,527 |
| Japanese yen |
-52,533 |
92,866 |
-38,773 |
-23,849 |
| Swiss franc |
-33,169 |
27,482 |
-25,772 |
-25,021 |
| US dollar index |
-46,250 |
2,587 |
-274 |
-7,016 |
| Mexican Peso |
-118,008 |
-14,488 |
-80,609 |
-88,096 |
| Australian dollar |
-102,706 |
-10,793 |
-83,329 |
-84,969 |
| S&P 500 |
-88,893 |
33,981 |
-40,235 |
-41,537 |
| T-note -10 yr |
-74,761 |
356,573 |
129,514 |
138,833 |
| T-bond -30 yr |
-43,324 |
158,206 |
36,969 |
43,365 |
| Eurodollar |
-1,179,414 |
105,872 |
-245,985 |
-184,615 |
| Crude oil |
-200,484 |
-23,057 |
-188,223 |
-198,611 |
| Heating oil |
-68,166 |
7,568 |
-59,257 |
-60,994 |
| Unleaded gas |
-91,597 |
-10,453 |
-85,987 |
-80,805 |
| Natural gas |
111,345 |
179,433 |
133,706 |
159,768 |
| Copper |
-35,704 |
1,793 |
-34,957 |
-35,147 |
| Gold |
-302,740 |
-207,691 |
-254,582 |
-259,770 |
| Platinum |
-32,628 |
-15,759 |
-30,152 |
-29,067 |
| Silver |
-65,413 |
-37,800 |
-49,751 |
-50,891 |
Commercial Net Tracker instructions:
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A) If the current value is at a 12-month low, the cell will display a red/burgundy background. B) If the current value is at a 12-month high, the cell will display a green background. C) If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D) If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
Proceed to Page 3 for this week's detailed fundementals charts...
Fundementals
Soybean fundamental outlook — Medium-term bullish — The medium-term trend remains bullish because of concerns about South American weather and continued strong Chinese demand. The U.S. stocks/use ratio is very tight at 5.5%, but the world stocks/use ratio is near average at 23.5%.
Corn fundamental outlook — Medium-term bullish — The medium-term trend remains bullish because of South American weather concerns and strong demand, including strong domestic demand with record ethanol production (and the recent one-year extension of the ethanol tax protection measures). The stocks/use ratios are the second tightest in three decades with the U.S. stocks/use ratio at 6.2% and the world stocks/use ratio at 15.5%.
Fundamental outlook — Bull market correction — Wheat prices in early August jumped to a two-year nearest-futures high of $8.41 a bushel on news of the worst drought in Russia since record-keeping started 130 years ago, but wheat prices have since moved in a five-month consolidation range. USDA’s unexpected hike in its U.S. and global wheat inventory estimates undercut prices, but adverse weather in Australia and a lack of Russian exports is bullish. The U.S. wheat supply situation remains above-average with the U.S. stocks-to-use ratio at 35.2%, but the global stocks-to-use ratio of 26.5% is tighter and near the decade average.
