Currencies Current Markets

Mother Nature’s Resilience

The current corn crop appears to have materially overcome the delays of a wet spring. April’s plantings were 30% behind normal. The picture became grimmer with May’s plantings were as much as 50% behind normal. This led to serious concerns as yield has been directly correllated to planting date with yield falling consistently with date planted after May 1st. However, through the modern technology of GPS, tractors were able plant through the night as the wether allowed. This led to being fully planted by June’s acreage report. Now that the corn has been in the ground and had a chance to …

Trading Strategies

Counter Trend Moves…What’s Next?

This week’s trading was featured many strong counter trend moves. Many of the markets saw swift turnarounds in trends that have been established for weeks and months. Th 64 million dollar question is; “What’s Next?”Here is what I’ve defined as established trend and counter trend moves.The following markets are share the following traits:

1) They are all near their respective 13 week highs or, lows. The market began within spitting distance of its  recent extreme.

2) Their weekly sentiment readings are > 70 or < 30, respectively. Each market has a large, one sided public following.

3) They’ve experienced a large 5 day counter trend move. …

Macro Economics Macro Viewpoints

Govt. Legislation in Free Markets

By David Goldman, staff writer

NEW YORK ( — Some of the Democratic lawmakers leading the campaign to crack down on oil traders appeared Wednesday before the House Committee on Agriculture to explain their proposals.

A dozen or so bills have been introduced on the subject of oil speculators, and Democratic leaders in the House have promised to address the issue by tackling what they call “excessive” speculation.

But some Congressmen are skeptical that the legislation will do any good – and could even cost consumers more by driving up the price of other commodities such as corn and soybeans.

“Given …

Trading Strategies

The “Market Book” as a Trading Tool

    RJO Vantage has a tool called the “Market Book.” The Market Book provides live access to the resting bids and offers in the electronic market. The effectiveness of the Market Book becomes more and more apparent now that 90+ percent of total commodity volume is executed via electronic trading platforms. As a former pit trader in the S&P 500, I find myself used to looking at the depth of the market’s bids and offers to establish any strength or weakness biases the market may have at a given price level.     This morning’s action in August live cattle was an …

Current Markets

Corn Crop Deterioration

The fundamentals f the corn market continue to point towards higher and higher prices. I understand that many people had a hard time forcing themselves to buy new crop corn $6 a bushel.
Unfortunately, $7 is here and $7.50 is not far off. The corn market is experiencing a “perfet storm.”
The short list of contributing factors are:
1) Tight ending stocks leave us very dependent on this year’s crop.
2) Increasing global (Asian) demand for red meat funnels more corn to feed.
3) Declining Dollar increases global demand for our exports.
4) The late start to this year’s crop will have a material …

Current Markets Macro Viewpoints

Defending the $ and Popping the Bubble

Yesterday, Bernanke stated that a weak Dollar was not in America’s best interest. Typically, this statement would be argued against based on a weak Dollar’s contribution to exports
helping to grow a weakened domestic economy. Bernanke’s point, I think, is that inflation is a bigger worry than recession. Dollar based commodities, primarily grains and energy are having a greater
negative impact on our economy than can be offset through higher exports. Inflation in these primary goods is acting as a tax on the American consumer. Right now, the economy cannot create enough
high quality jobs fast enough to offset the …