Tidbits, Wheat Shorts, Meal Puts, Markets & Rain Days Update 2/1/23
Highlights
Spec funds are net short 73,802 contracts of CBOT wheat, which is soft red winter wheat. Those funds have an obligation to buy 369 million bushels of SRW wheat or wheat futures, which is more than the U.S. produced in 2022 and nine times more than the carryover projected for May 31st, 2023. Do not be short soft red winter wheat. It is very difficult not to be super bullish CBOT wheat with such stupidity in play.
OPEC+ meets today to discuss oil production levels. The market expects they will leave levels unchanged.
The Federal Reserve is expected to announce a quarter percent interest rate increase shortly after the CBOT closes today.
The US Dollar Index is at its lowest level in seven months as expectations are that the rapidly increasing interest rates has diminished.
Tidbits
Switzerland has been neutral in every foreign discussion, dispute, and war since 1815. They are now considering of not being neutral in global affairs. Given every household in Switzerland is required by law to have a firearm in the house, their foreign policy protocols will probably be rather unsettling to most world leaders.
The EU economy expanded 0.1% in the 4th quarter, better than expected.
The USDA issued its Semi-Annual Cattle Inventory Report yesterday.
All cattle and calves: 97% of a year ago (89.3 million head; the all time peak was 132 million head in 1978; they ate a lot of hay in them days)
All females which have calved: 97%
Beef cows: 96%
Milk cows: very slightly higher
Beef heifer replacements: 94%
Bob reported a ~148 acre farm with ~115 acres of really wet soil tillable in Western Clark County, Ohio went on the market ten days ago for $10,000 per acre; it was under contract a few days later.
Thanks to Rick for sending this link about SAF being demonstrated safe in the Middle East:
Soybeans Meal Puts
All open or day orders to buy September $350 soybean meal puts at $5 were filled Monday. One $350 put traded yesterday at $5.00; settlement was $4.75. The open interest (number on the books) of the September $350 meal put is 392.
Since January 17th, spot month March soybean meal futures traded as low as $463.50 on the 23rd and as high as $490.30 two days ago, which was a new contract high for the March contract, but it did not exceed the ten year high made made by the spot month August 10th of $531.20. Since January 17th, March meal has a trading range of $36.80.
Since the 17th, September meal low was $406.00 on the 23rd and the high was Monday at $422.00, a range of $16. If you are actively participating in this educational event, you should have an open order placed to buy the September $360 put at $5. Presently, the scoreboard looks like this:
Market Data
This morning:
Crude oil is at $79.69, up $0.82
The dollar index is at 101.93, down 0.16
July palm oil is at 3,806 MYR, down 114. The contract high was made September, 1st at 4,365 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.
July cotton is at $87.90, up $0.44 per cwt. The contract high was made September, 1st at $101.64 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas is at $3.283, up 0.042. The contract high was made September, 6th at $5.938. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $2.8452 per gallon, down 0.0178. The contract high was made November, 4th at $3.1450. ULSD stands for Ultra Low Sulfur Diesel.
March Dow Futures is at 34,090, down 66. The lifetime high is 36,832 on January 5th, 2022.
Rain Days Update
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days
Every day, every place in the world has a ten day weather forecast issued many weather services.
By a "place", we mean a Findlay, Ohio; Arcadia, Minnesota; Atlantic, Iowa; Fullerton, Nebraska; Cordoba, Argentina; Craig, Colorado, Saratov, Russia and ten million localities we have never heard of.
The ten day forecast predicts the high and low temperature for each day as well as whether or not rain is predicted for each of the ten days, likewise cloudy, partly cloudy, sunny, etc.
We look at the ten-day forecast and if we see rain is predicted for 4 of the next 10 days, we record a "4" for that location on the chart for the today. It does not matter whether it is one-hundredth of an inch or 5 inches. We realize about half the days expected to receive rain never get rain that day, but we must be consistent in what we report each day and every day because rain makes grain a few key weeks of the growing season. Of course, we scan the temperatures and the amounts of rain just to see if anything is getting way out of the norm.