The Dow Jones Industrial Average settled at 31,500.68, up 1,611.9 points for the week.
Crude oil settled at $107.06, down $3.42 for the week.
The dollar index settled at 104.12, down 0.53 for the week.
The Baltic Dry Bulk Index settled at 2,331, down 247 points for the week.
Below is corn, soybeans and wheat basis outlook this week.
Corn
Futures July futures at $7.50¼, down 33¾ cents for the week; December at $6.74, down 57 cents for the week.
Basis (N = July, Z = December; e.g. +5N means 5 over July)
Dayton, Ohio Cargill is paying $7.55¼, +5N, 10 cents weaker basis; New Crop basis is -30Z, steady. Iowa Falls Poet is paying $7.82, -32N, 10 cent weaker basis; New Crop basis is -30Z, steady.
COT Report 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. You can find the explanation of Open Interest and Funds trades here: https://www.wrightonthemarket.com/post/education-open-interest-of-specs-01-23-2022 Big Spec Funds change: -13,783 to 178,340 net long Index Funds change: -11,348 to 442,280 net long Open Interest change: -14,969 to 2,199,804 Crush Margin Corn Ethanol Crush Margin is $2.16 this week, $2.39 last week, $1.56 a year ago. The price of corn subtracted from the value of processed products = ethanol crush margin.
Soybeans
Futures July futures at $16.10¾; down 91¼ cents for the week; November at $14.24¼; down $1.13¼ for the week. Basis (N = July, X = November; e.g. -20X means 20 under November) Iowa Falls Cargill is paying $14.81, -$1.30N, 10 cents firmer basis; New Crop is -40X, steady. Sidney, OH Cargill is paying $16.16, +5N, 20 cents weaker basis; New Crop is -20X, steady. COT Report Big Spec Funds change: -11,346 to 66,284 contract net long Index Funds change: -1,349 to 197,275 net long Open Interest change: -11,563 to 959,863 Crush Margin Soybean Crush Margin: $2.81 this week, $2.31 last week, $2.81 year ago Crush margin = value of the oil and meal extracted from a bushel of beans minus the cost of a bushel of beans.
Wheat
Soft Red Winter Wheat (CBOT)
Futures July futures at $9.23¾, down $1.10½ for the week. Basis (N = July; e.g. -28N means 28 under July) Cash price Mechanicsburg, OH is $8.96, -28N, 1 cent weaker basis. Cash price Lowell, MI is $9.36, +12N, 12 cents firmer basis. COT Report Big Spec Funds change: -1,127 to 42,370 contracts net short Index Funds change: -3,784 to 141,936 net long Open Interest change: -12,739 to 453,012
Hard Red Winter Wheat (Kansas City BOT)
Futures July futures at $9.92½, down $1.12½ for the week. COT Report Big Spec Funds change: -3,541 to 2,095 contracts net long Index Funds change: -2,109 to 60,784 net long Open Interest change: -2,858 to 199,865
Hard Spring Wheat (Minneapolis Grain Exchange)
Futures September futures at $10.70½, down 99½ for the week.
What you should have noticed
The Dow had a big up week. Those investors think there is no recession on the horizon. A 50 cent increase in the soybean crush; that is big bucks for crushers. Ethanol crush margin was down 23 cents, but 60 cents more than a year ago and a year ago was a record large ethanol crush. Open interest declined in every commodity; investors liquidated positions. Since prices were sharply lower, the liquidation was done by longs. Shorts have to buy sometime. Big spec and index funds were all net sellers. With the exception of Soft Red Winter Wheat, their net number of contracts sold were more than the decline in open interest. That means the commercials (cash grain traders) were net buyers. Commercials buy futures when they sell cash grain and sell futures when they buy cash grain. They were selling a lot more cash grain than they were buying. That can't go on very long because they will run out of grain and beans to sell. Commercials are slow to flip their positions, but the spec and index funds are quick to flip their positions. This time of year, they will re-enter the market as soon as they have a sense of the quality of the crops.
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