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Weekly Basis 03/26/2022

The Dow Jones Industrial Average settled at 34,8761.24, up 106.31 points for the week.


Crude oil was at $112.71 late Friday, up $8.33 for the week.


The dollar index settled at 98.81, up 0.59 for the week.


 

July corn settled at $7.34¾, up 22¼ cents for the week.


Dayton, Ohio Cargill is paying $7.20 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 $7.45 for corn, 10 over the July futures, which is 3 cents weaker 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 added 8,651 contracts to their corn position to bring them net long 304,695 contracts of corn. The index funds added 7,722 contracts to their position to bring them net long 474,754 contracts of corn.


Corn open interest increased by 66,274 contracts to 2,149,285 contracts.


Eastern Corn Belt ethanol crush margin is $2.36 today compared to $2.26 last week and $1.46 a year ago. The price of corn subtracted from the value of processed products = ethanol crush margin.


 

July soybeans settled at $16.88½, up 42¾ cents for the week.


Sidney, Ohio Cargill is paying $16.84 for beans, 5 under the July futures, which is a steady basis with a week ago. Their fall delivery basis is also steady at 25 under the November.


Iowa Falls Cargill is paying $15.88 for beans, $1.00 under the July futures, which is steady with a week ago. Their fall delivery basis is also steady at 40 under the November.


The big spec funds added 6,028 contracts to their position to bring them net long 112,072 contracts of beans. The index funds added 9,224 contracts to their position to bring them net long 217,249 contracts of beans.


Soybean open interest increased by 17,229 contracts to 1,016,326 contracts.


The soybean crush margin is $3.95 today, compared to $3.76 last week and $2.05 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 up 47¾ cents this week to settle at $10.92½.


The local elevator is paying $10.30 for new crop wheat, 62 under the July, which is a 12 cent weaker basis than last week. King Milling in Lowell, Michigan is paying $11.01, 25 under the July, 2 cents firmer than a week ago.


The big spec funds added 3,782 contracts to their soft red winter wheat (CBOT) position to bring them net short 41,255 contracts. The index funds cut 412 contracts from their position to leave them net long 165,037contracts of wheat.


Soft red winter wheat open interest increased by 5,021 contracts to 518,617 contracts.


KC July wheat was up 45 cents to settle at $11.07.


The big spec funds added 731 contracts to their hard red winter wheat position to bring them net long 16,289 contracts. The index funds cut 317 contracts from their position to leave them net long 64,996 contracts of hard red winter wheat.


Hard red winter (KC) wheat open interest decreased by 785 contracts to 208,907 contracts.


September (U) 2022 spring wheat was up 54¾ cents this week to settle at $10.83¼.


The Baltic Dry Bulk Index settled at 2,567, down 21 points for the week, but still very expensive ocean freight.


 

What you should have noticed:


After gaining more than 1,800 points last week, the Dow was able to gain another 106 points this week.


Open interest smartly increased in corn again. The corn market is attracting a lot of new money and the new money is buying. Ethanol crush margin gained 10 cents despite spot (nearby, spot, cash) corn was sharply higher. The soybean crush margin gained 19 cents even though spot beans gained 42 cents.


Big spec and index funds were net buyers in corn and beans and net sellers in soft red winter wheat. They know the seasonal trend is up in corn and beans but down in wheat. Did you know that? They also know it takes no more margin money to establish a long corn position if a trader is already short wheat. Likewise, if a trader is already long beans, it takes no more margin money to be short wheat (or corn).


 

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