Corn: After three weeks of moving towards neutral, this week found the funds getting longer again. Commercials were the sellers. Interestingly, overall open interest has been declining since mid-April. That should imply increased polarity. In theory, that should increase market stability up to some tipping point. Then a trend should itself become stable – until it ends.
Beans saw (at last) buying by funds, selling by commercials. This doesn’t guarantee much of anything, but it seems to me that it is long overdue.
Wheat is lots of fun (??). Commercials were the only longs last week, with funds a tiny bit short and farmers still short. This week most of the longs are funds, commercials are a little long and farmers are a little less short.
In terms of price action, July corn wasn’t so hot. It wasn’t terrible – looks like a normal rest, preparing to go higher. It is, however, running out of time. December had what I would term a constructive week, a.k.a. mildly bullish. On the other hand, a couple of daily closes above 686 will attract some attention, closes above 690 more attention and closes above $7 are likely to be the kick-off for a major rally.
July beans are sort of so-so, and, like corn, the clock is ticking. November did better this week, but we will need a close above $14 to turn on the fund buyers, and a whole week of $14+ closes would really be good.
Wheat is like corn and beans, though December had the least constructive week of the three. A few closes above $10 should ignite fund buying.
The magic numbers going forward from here seem to be $6, then $5.50 for corn bears, and $7 for the bulls; $7.50 for wheat bears, and $10 for the bulls; $12.25 then $11 for the bean bears and $14 for the bulls.
