Weekly Basis 9/25/22
- Wright Team
- Sep 25, 2022
- 3 min read
The Dow Jones Industrial Average settled at 29,590.41, down 1,232.01 points for the week.
Crude oil settled at $79.43, down $5.97 for the week.
The Dollar Index settled at 113.02, up 3.38 for the week.
The Baltic Dry Index (a shipping freight-cost index) settled at 1,816, up 263 points for the week.
Below is corn, soybeans and wheat basis outlook this week.
Corn
Futures
December futures at $6.76¾, down half a cent for the week.
Basis
(Z = December; e.g. 50Z means 50 over December) (Futures price + Basis = Cash price)
Dayton, Ohio Cargill
Old crop basis is even with Z, 30 cents weaker from last week, $7.76¾ cash price;
New crop basis is -30Z, steady.
Iowa Falls Poet
Old crop basis is 60Z, 60 cents firmer, $6.77 cash price;
New crop basis is -20Z, 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. Open Interest is the number of contracts on the books.
You can find our 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: 13,874 to 173,329 net long.
Index Funds change: 457 to 371,347 net long.
Open Interest change: 25,408 to 1,817,528.
Crush Margin
Corn Ethanol Crush Margin was $2.67, $2.30 a week ago and $3.22 a year ago.
The price of corn subtracted from the value of processed products = ethanol crush margin.
Soybeans
Futures
November at $14.25¾; down $0.22¾ for the week.
Basis
(X = November; e.g. -20X means 20 under November) (Futures price + Basis = Cash price)
Iowa Falls Cargill
Old crop basis is 40X, 60 cents weaker basis, $14.65¾ cash price;
New crop basis is -30X, steady.
Sidney, OH Cargill
Old crop basis is -10X, 85 cents weaker, $14.15¾ cash price;
New crop basis is -20X, steady.
COT Report
Big Spec Funds change: -9,288 to 41,703 net long.
Index Funds change: 1,241 to 133,138 net long.
Open Interest change: 14,832 to 808,861.
Crush Margin
Soybean Crush Margin was $4.44, $4.89 a week ago and $3.22 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.
Wheat
Soft Red Winter Wheat (CBOT)
Futures
July 2023 futures at $8.88¼, up $0.12½ for the week.
Basis
(N = July; e.g. -28N means 28 under July) (Futures price + Basis = Cash price)
Heritage Coop. at Mechanicsburg, OH
New crop basis is -40N, steady, $8.48 cash price.
COT Report
Big Spec Funds change: 6,094 to -47,491 net short.
Index Funds change: -2,133 to 115,905 net long.
Open Interest change: 14,630 to 387,820.
Hard Red Winter Wheat (Kansas City BOT)
Futures
July 2023 futures at $9.31¾, up $0.10½ for the week.
Basis
(N = July; e.g. -40N means 40 under July) (Futures price + Basis = Cash price)
Producer AG at Canton, KS
New crop basis is -30N, steady, $9.02 cash price.
COT Report
Big Spec Funds change: 3,112 to 99 net long.
Index Funds change: 492 to 51,549 net long.
Open Interest change: 4,856 to 165,458.
Hard Spring Wheat (Minneapolis Grain Exchange)
Futures September 2023 futures at $9.26, up $0.06 for the week.
What you should have noticed
Dow Jones lost 4% this week, as it did last week, but still about 800 points above the June low.
Crude oil is lower by almost $6, a big hit, while the Dollar Index went notably higher.
Baltic Dry Index got another big gain, +67% during September from 1086 to 1816.
At HRW Wheat Big Spec Funds went from short to long overall position.
December corn is almost steady for a week.
Spot basis went lower in general for corn and soybeans (Iowa Falls Poet raised corn basis 60 cents, probably some local distortion).
Open Interest (OI is the number of contracts on the books) increased at every commodity, new money coming into commodities.
Crush margins are still very profitable.
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