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With an hour left to trade, grain prices are in the red. Wheat and soybeans are 8 to 9 cents lower and corn off 3 to 5 cents. Export sales for wheat were outstanding this morning as announced by the USDA and they were decent for corn. Unfortunately, they were dismal for soybeans which is impacting the rest of the grain complex in a negative fashion.
But the weakness with grains today is not much difference than what is being seen with the CRB Index, precious metals, sugar, cocoa, coffee and at one time, the cattle market. Each of those markets dropped to multi month lows earlier in the day, remain in the ugly and the weakness is not going unnoticed in the grain complex. This is one of those days where, "if you are long, you are wrong!
The bulls have been embarrassingly wrong about the direction prices are taking. Woefully wrong in fact. And that reminds me of a story.
A gorilla walks into a nightclub, strolls up to the bar, slaps a $50 bill down and says to the barkeep, "Gimme a beer!" The barkeep, startled, nods his head, picks up the $50 and goes to the end of the bar to get change and a beer. While filling up a mug the bartender says to a friend sitting close, "Hey. Did you see that gorilla give me $50 for a beer? Was that amazing or what?" His friend, glancing out of the corner of his eyes at the gorilla reply's in a very subdued voice. "Yea, I saw that. It was amazing." Lowering his voice to a whisper he goes on to say, "But only give him back $5 in change. Gorilla's are notoriously bad with money. Notoriously bad."
The barkeep, head tilting slightly and an eye brow arching replies, " Really! They're bad with money?" Carrying the beer in one hand and change in the other the barkeep approaches the gorilla. Placing the $5 bill on the bar the barkeep says, "Here you go. Enjoy and here's your change."
As the gorilla was sipping his beer and slowly looking around the club, the barkeep says, "I'm sure glad you came by. We don't get many gorillas in here for some reason." Turning back to the barkeep the gorilla says, " I bet you don't. Not with beer at $45 a glass." The barkeep was uncomfortably embarrassed.
However, cattle prices plunged to a multi month low early in the day but closed higher, carving out an upside key reversal. Cattle either bottomed today or will do so tomorrow at the latest. The market can be bought.
If cattle have bottomed, corn is on the cusp of doing the same thing. I may be embarrassingly wrong with such a forecast but only time will tell.
And as I am about to post this broadcast, soybeans are only down 5 cents, meal off a meager $1.50, soy oil about to kiss unchanged, Chicago wheat off 4 cents and corn down a manageable 3 cents.
The grains have 45 minutes left to trade and I am hoping for a higher close. I also hope I am not embarrassingly wrong like that cheapskate bartender!
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