Commentary

November 20 2012 4:40 PM

First things first, markets are closed Thursday day session and night for our Thanksgiving holiday and Fridays grains open at 9:30 central time and close at noon central time. It's a difficult week as we have a short holiday schedule as month-end winds down creating a lot of daily volatility. Monday’s first report was on the demand side with our weekly export inspections report. Wheat inspected for near-term shipment was 11.1 million bushels versus 10 the week prior, 13.7 a year ago and four week average of 12.5. Very weak demand signal as 25 m.b. or more is needed to push prices higher from a demand perspective. Corn inspections were 14.3 m.b. versus 9 the week prior, 37.8 year ago and four week average of 12. Slight improvement on the four-week average, but 30+ is needed to be price bullish. Bean inspections came in at 61.9m.b. versus 64.6 the week prior, 40 a year ago and four week average of 61.7. Exports remained good but leveling off even though we have dropped 1.70 the last two weeks. They should be better.

November 20 2012 10:39 AM

Cease Fire Hope rise along with the oil market. While Secretary of State Hillary Clinton makes her way to the Middle East to broker what more than likely will be a cease-fire between Israel and Hamas. With an Israeli ground offensive most likely averted the focus will go back to the global economic outlook and something as mundane as weather.

November 16 2012 8:12 AM

After the Obama admistration backed denied that they were going to try to institute a Carbon tax contradicting Senate Majority Leader Harry Reid, is it possible that a back room deal between the energy industry and the administration could open the door for a new tax coming to a gas station near you? Is it possible that the Obama admistration is making the energy industry a deal that they just can’t refuse? In other words if the industry backs off its opposition to a carbon tax the Administration might get off their backs? If they continue to oppose it l the administration might make their lives a living shall we say night mare? Does the energy industry believe that they can make up for the tax by being able to produce more oil and gas and will Republicans join in if the administration but more federal lands in play? Well that is my take on a Bloomberg article and my understanding of Politics done the Chicago way.

November 15 2012 12:30 PM

Oil prices that have been wafting in a sea of economic uncertainty rocketed on reports of an Israeli rocket attack that killed a top Hamas military leader. Fears that this could “open up the gates of hell” as Hamas has promised, sent traders looking for some upside protection. Israel says that the attack was in response to the fact that Palestinian militants have been using this area in the Gaza Strip as a base to fire rockets which they have been doing in recent days. Oil traders feared that the conflict could draw in others, such as Egypt, and could put at risk ship traffic along the Suez canal. The UN Security Council held an emergency meeting at the request of Egypt and Morocco but it was unclear whether it will calm down the situation.

November 14 2012 10:26 AM

Dec. Bonds are currently 20 lower at 151’15 and the 10 Yr. Notes 8 lower at 133’25.5. Yesterday the Bonds traded as high as 152’15 slightly above resistance of 152’04 an area stated in my last “Report” (dated 11/12/2012) where I am willing to initiate a trade from the short side of the market. If you went short, either take the short term profit or use a protective buy stop just below your entry level. If the market should trade below the 151’00 level lower your protective buy stop to the 151’22 level. Support remains in the 150’04 area. I still have a long term negative bias, that being said, I am still looking for short term trades, cognitive at the moment of Fed policy and the coming “Fiscal Cliff”. If you are looking for a long term trade consider out of the money putsa for either Jan. or Mar. expiration.

November 12 2012 9:36 AM

Dec. Bonds are currently 1 lower at 151’19 and the 10 Yr. Notes 2.5 lower at 133’26.5. Expect a slow day in the Bonds as the cash market is closed in observance of Veteran’s Day holiday. For the moment support is the 150’04 level and resistance 152’04. I am currently on the sidelines with a somewhat negative bias.

November 09 2012 9:33 AM

As we head towards the fiscal cliff and the markets from gold to bonds to stocks to oil start to price in a recession the question becomes, just whose recession is it anyway? Is this going to be a Democratic recession or a Republican recession? Today President Obama may give a bit of a view on this fiscal cliff hanger in what could become a defining moment for the success or failure of his second term. Now some thought I was a little hard on the President and Harry Reid, even after Mr. Reid’s comments about a tax increase mandate, but in reality I was trying to point out the dangers of that rigid position especially when it comes to the implementation of a carbon tax that would drive an already struggling middle class into economic oblivion.

November 08 2012 12:16 PM

Dec. Bonds are currently 9 lower at 150’01. If you went short above 150’15 yesterday (the high was 150’19) either take the short term profit or use a protective buy stop at 151’06 for protection. If your intention is to look for a longer term trade, lower your buy stop to break even if the market trades below the 149’26 level. Support is currently the 148’08 level.

November 07 2012 10:15 AM

Futures markets correctly priced in an Obama victory yesterday and all of the economic pain that will go along with it. As I have said weeks ago, before it was a popular topic, that an Obama victory would be wildly bullish for commodities as it would mean a vote of confidence for Fed Chairman Ben Bernanke and his policies of easing. Of course at the same time that means that the market is pricing in perhaps a decade of more economic pain. The markets are saying that under an Obama presidency get ready for continued high unemployment, higher budget deficits, higher taxes, and higher gasoline prices and less job creation.