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Writer's pictureWright Team

Weekly Basis 03/19/2022

The Dow Jones Industrial Average settled at 34,754.93, up 1,810.74 points for the week.

Crude oil was at $104.38 late Friday, down $5.08 for the week.

The dollar index settled at 98.22, down 0.88 for the week.

July corn settled at $7.12½, down 16¼ cents for the week.

Dayton, Ohio Cargill is paying $6.98 for corn, 15 cents under the July, steady with a week ago. Their fall delivery basis is steady at 30 under the December futures.

Poet at Iowa Falls is paying $7.26 for corn, 13 over the July futures, which is 3 cents firmer than a week ago. Their fall 2022 delivery basis is steady at 30 under the December futures.

The CFTC’s Commitment of Traders Report (COT) is issued every Friday afternoon. It reports open interest as of the close of business the previous Tuesday.

The big spec funds cut 28,054 contracts from their corn position to leave them net long 299,044 contracts of corn. The index funds added 24,499 contracts to their position to bring them net long 467,032 contracts of corn.

Corn open interest increased by 28,416 contracts to 2,083,011 contracts.

Eastern Corn Belt ethanol crush margin is $2.26 today compared to $2.26 last week and $1.59 a year ago. The price of corn subtracted from the value of processed products = ethanol crush margin.

July soybeans settled at $16.45¾, down 5½ cents for the week.

Sidney, Ohio Cargill is paying $16.41 for beans, 5 under the July futures, which is 3 cents firmer basis than a week ago. Their fall delivery basis is steady at 25 under the November.

Iowa Falls Cargill is paying $15.46 for beans, $1.00 under the July futures, which is steady with a week ago. Their fall delivery basis is steady at 40 under the November.

The big spec funds cut 23,177 contracts from their position to leave them net long 106,044 contracts of beans. The index funds added 13,651 contracts to their position to bring them net long 208,025 contracts of beans.

Soybean open interest decreased by 3,956 contracts to 999,098 contracts.

The soybean crush margin is $3.76 today, compared to $4.13 last week and $2.00 a year ago. Crush margin = value of the oil and meal extracted from a bushel of beans minus the cost of a bushel of beans.

CBOT July soft red winter wheat was down 32½ cents this week to settle at $10.44¾.

The local elevator is paying $9.56 for new crop wheat, 50 under the July. King Milling in Lowell, Michigan is paying $10.18, 27 under the July.

The big spec funds added 10,113 contracts to their soft red winter wheat (CBOT) position to bring them net short 37,473 contracts. The index funds added 6,853 contracts to their position to bring them net long 165,449 contracts of wheat.

Soft red winter wheat open interest decreased by 5,262 contracts to 513,596 contracts.

KC July wheat was down 19 cents to settle at $10.62.

The big spec funds cut 9,728 contracts from their hard red winter wheat position to leave them net long 15,558 contracts. The index funds added 5,816 contracts to their position to bring them net long 65,314 contracts of hard red winter wheat.

Hard red winter (KC) wheat open interest decreased by 4,688 contracts to 209,692 contracts.

September (U) 2022 spring wheat was down 5½ cents this week to settle at $10.28½.

The Baltic Dry Bulk Index settled at 2,588, own 116 points for the week.

What you should have noticed:

It has been a long time since the Dow gained 1,800 points in one week.

Open interest smartly increased in corn and decreased slightly in the other commodities. The corn market is attracting new money; new money is usually buying.

Ethanol crush margin was steady and but 67 cents better than a year ago. The soybean crush lost 37 cents, but is very profitable and $1.76 above a year ago. Both numbers are bullish.

The big spec funds were net sellers on all four commodities; the index funds were net buyers on all four commodities. The big spec fund managers are always looking for the quick buck; index fund managers are more economy oriented. If you want the commodity prices to go higher, you should like that the index funds are bullish.

The basis action in Iowa the past two months indicate the Western Corn Belt has too many beans and not enough corn.

Share your market outlook for corn, wheat and beans. The more opinions expressed, the more reliable is the resulting Bullish Consensus results. Bullish Consensus saved the Kennedy fortune. It will help build your fortune of we get enough opinions shared every week. Vote once a week at: https://www.wrightonthemarket.com/vote

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