This past Thursday’s USDA plantings and grain stocks reports did a number on grains. The reports showed domestic corn supplies (old crop) higher than expected, and corn plantings this year if recognized will be the highest since 1936. Friday corn dropped limit down and Soybeans slid. Corn closed Thursday at 695¼ and opened Monday’s trading session at 679. Nice $0.16¼ gap. Today’s price action moved DI Diff from below 5 to above 12.
Like corn we saw larger-than-expected US stockpiles of soybeans. Beans closed Thursday at 1404¾ and opened Monday’s session at 1401½. No large gap here.
If corn moves and closes below 650 can 600 be that far off? That will depend on corn’s planting season, which if compared to last year will be tough to beat. Last year we saw an incredible planting season for corn. And let’s not forget about big money.
Proceed to Page 2 for the latest COT Data...
Looking at the weekly charts below you can see that in corn starting on March 8 Producers starting adding to net shorts with -337,104 contracts net short from the previous weeks -318,318. Moving forward to last week’s report we see Producers net short -450,500 contracts. All through this time Managed Money was adding to net longs now at 229,203 contracts and our friends the Swap Dealers (think U.S. largest banks) are now net long 262,062 contracts.
In soybeans this past week we saw a minor bull move with Producers moving from -157,384 contracts net short to -162,469 and Managed Money moving from 103,197 contracts net long to 107,171.
If you need help understanding how to understand how to use the NEW COT report to your benefit get instant access to my new e-book "What Lies Beneath ALL Trends". It is filled with eye opening information.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...
So, looking at both charts, you can see exactly what happens as big money moves beneath these markets. This does not mean we won’t see corn under $6.00 or beans under $13.50. What it means is when a move up starts, big money will be supporting the move and that is good enough for me.
Click to enlarge.
Have a prosperous trading week.
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