The “old man” said that notice periods were usually opposite what one would think would make sense, and so too is the July 14 notice. Zero notices normally means the cert stock is so well wanted that price would jump up on the news. Not so, as the July and the spread turned double ugly today. July is finally doing what we thought it would, but its too late for specs to participate in what is now a merchant professional game of cards. Since July traded one extreme on the high side, we now expect it to trade the extreme the other way. July is still way over-priced, so look out below.
We attempted and failed at buying Puts and selling futures for Dec on Monday. Nothing done, then the rug gets pulled out. It rained again in Texas, and now we hear of farmers complaining about washouts and seed rot. Who would have thought?
No change here, sell Dec on any rally one catches that makes sense, and some that don’t. We whiffed Monday, so will keep trying. We have one eye on the CRB, and continue to believe that it has reached a multi-month top at the 670 level. The ag markets and the CRB have not been well correlated lately, and our bias is for ag markets to move lower through summer, unless there is a genuine weather problem. Regards Monday’s acreage, we are sticking with something around 11.2 M, but there are much larger issues in numbers elsewhere.Technicals
Spot July is doing what we thought it would, but we admit to not seeing the 700 point rally in a week from 84c to 91c. July is in the area of several targets previously mentioned, but the most glaring target is the massive gap below 7975 on the spot chart. Regards Dec, there is one more negative seasonal due on 6/28. Sell it.