Blog

Seems like all the focus is on cutting supply. Is the supply risk real? Yes, the risk is real: current economic conditions in this industry could force closures. Yet, with all that risk, January futures still closed down $8.50 for the week. So, who is selling it down here? First, it is industry longs who simply can't take it anymore. Next are the commodity funds. Yes, they are rolling positions, but they are also adding. Remember, their design is to hold X amount of positions with Y dollars in the account. When the market moves in their direction, they add ...

Recap: It was another miserable week in both futures and cash. The rallying cry for the fourth quarter is, “If we can only break even.” Hell of a way to run a business. The proactive stance this year was to have inventory when things spiked. That strategy drastically cut into margins. The fact that product never got cheap enough to help navigate the trade is likely to continue through the rest of the year. That same scenario does not appear on the futures side. Futures have fallen sharply and are starting to look at the 2025 lows as an objective ...

The Market: I have to lead with this fun fact. The Sept-Nov roll traded as high as +22.40. It started around -20 in early August and spent all of September positive. Open interest in the short fund category jumped 396 last week. At 6,605, that is the most we have seen in months. The roll starts next week and will probably continue right up to expiration. If you paid -17 and it only gets to -7, you pick up $10. When was the last time you made $10 on a car of cash? I'm just saying...... The focus is on ...

Corn came into the report already on the defensive. After running to the $5.30 area in mid-September on Black Sea export disruptions and USDA’s September yield cut to 178.5 bu/ac, December futures broke hard on September 30th when the quarterly Grain Stocks report found 2.095 billion bushels of old-crop corn on hand, 173 million more than USDA had been carrying and roughly 35% above a year ago. December corn lost 21 cents that day and has spent the last week defending the $5.00 level, with a U.S. dollar sitting near a 1.5-year high adding to the pressure. The one supportive ...

Recap: November futures fell $11.50 for the week on low volume. The commitment of traders report shows a gain in both the commercial longs and in the commodity fund shorts. Total open interest for the week was up 700 to 10,546. The additional 300 after the Tuesday report will be added to both piles. It indicates that both are committed to their positions. That's important. Macro: Having a long position anywhere in this industry is difficult when rates are making new highs. The longs are locking in lower pricing—a very micro strategy in a market being driven by macro forces ...