Good morning friends!
Corn      353’0   -1’0
Soybeans  975’6  -2’4
Chi Wheat   419’6  -4’0
KC Wheat 420’6   -2’2
Cotton  70.99   -.20
 

Markets were quiet and slightly higher until I sat in my chair here at 100 S Wacker.  At about 7 am we saw markets dip slightly as wheat falls below 420 and Corn makes a run back below 350, I’ll be very interested to see if Soybeans can hang above 970 and cotton can trade above 71.00 for any extended period of time.  There are bullish fundamental stories in play there, but both markets will lack short covering as a reason to rally.
The Board of Trade here in Chicago has enjoyed 3 days of fund buying, the question is what takes over from here?  The key will be whether values can hold above support with demand still being the story. Supply is not an issue with any of these markets, including cotton.  One more push to the upside offers a sales opportunity for those who need to move product in Q4.I expect markets to be very slow over coming days, with little to trade around other than weather and macro news.
The US dollar is slightly weaker with crude oil slightly higher and world stock markets are mixed awaiting China’s GDP rate and the EU Central Bank Policy update. I was talking about interest rates with a client yesterday, he got me looking at the interest rate charts, specifically the 30 year treasury. Boy, do treasuries look toppy.   Economically, it would not make a ton of sense that prices of commodities would rally on a rise in interest rates.  But from a money flow perspective, that is something that could happen.  There is a boat load of money parked in treasuries right now.  When that money comes out of treasuries, it has to go somewhere.  Equities and commodities alike could catch a run sometime in Q1 of next year if inflation targets would look like they are in play. We have to get through the election first, but I would look for a spark in these markets after we get new leadership in the White House.

No pod or newsletter this afternoon.  I have to run out of here early.  I was asked to join Tyne Morgan on the Ag Day show. You might be seeing me on TV sometime in the future, hopefully I do not embarrass myself