USDA Grim Reaper for the Bulls : Beans, Corn , Wheat all take a header

  • Posted on: June 30, 2014

USDA found an extra 130 million bushels of corn, as they finally reflect a decrease in feed usage.  New crop acres at 91.6 we off by 80K acres.
However, the biggest shocker was the bean acres.  The average guess was 82 million acres.  We added 3 million, roughly; takes us to 86 Million acres planted.
At trend line yields, that projects to a huge carry out.

The spec long corn took it on the chin, but we still have 25 days of action on that.  I want to hold it through the July 4th weekend.

If you are a producer and have not sold,  now is NOT the time to be selling cash grain in the hole.
We will get a  bounce. You just have to be willing to sell the physical grain.

In January we posted the low at $4.35 and then we rallied 82 cents over the next 5 months.   That was 16 cents average a month.  In the last 6 weeks we gave all that back, and then some.  A classic case of market rallying up the staircase, but then taking the escalator or the Elevator shaft  lower.

The bean market took the brunt of the beating on the acreage increase.; ,  November  broke down to 1150, settling down 71 cents.  That’s $3500.00 per contract.
Funds came in long 60K and it looks like they sold em all today, but we’ll have to see what the COT says and the open interest says to be sure.

Corn,  the funds were long “only” 160K contracts.  We’ll have to see what the open interest does there as well.

Wheat acres increased, and actually  finished 10 cents off its low, but still down 15 cents a bushel.

If KC wheat Dec settles below $7.00 it could get really painful for the bulls.

CZ corn looks to be desperately seeking the $4.00 print.

SX has its eyes on $11.00

This market will get over sold, but longer term I remain bearish.

I’d still look for places to try to catch counter trend bounces higher.

CER