Unfortunately, there has not been a great deal of good news for the grain markets as prices continue to bleed lower into the end of the month. The lack of good news has driven Funds to push the pedal to the metal setting new records for selling.
Transcript
Scott Shellady:
“either day in March, right, let’s get to our next guest analyst. And that’s Oliver slope from Blue Line futures. He’s in Chicago, Chicago. All right, Oliver, I just rattled off a bunch of numbers, I’m gonna let you take over from here, the floor is yours.”
Oliver Sloup:
“Oh, man, that said, that’s a tough task with a lot of red on the screen. I mean, it’s really not anything new. And we saw it in last week’s Commitment of Traders report, surprise, surprise funds were net sellers, again, a 13th consecutive week for soybeans. And it looks like they’re going to be a net sellers. Again, here this week in corn probably is going to eclipse the old record from 2019. On the short side, and when talking with a lot of clients and prospective clients here, you know, over the course of the last couple of weeks, it seems that really that’s the only catalyst that people think is bullish is the fact that funds are so short outside of that, there’s really no reason for this market to rally unless we get short covering and what’s going to be the thing that spurs that right now, there just really isn’t a whole lot out there. I think potentially, we get past March options expiration at tomorrow’s close, get into delivery, and then turn the calendar over past the crop insurance pricing period. And potentially we can get a little bit of a relief rally. But has that been talking with the guys if we do get a nice little pop here on these new crop contracts, I think you got to take advantage of that and use it as an opportunity. And if you don’t want to take full exposure with the futures market volatility, despite the slow bleed lower, still relatively low. So options are a great way to help manage that risk here into the springtime.”
Scott Shellady:
“I also feel like it’s just maybe maybe sometimes overthink things. I mean, that’s probably true actually for sure. But what about the strong hand is the fund he’s not being scared away he’s in and there’s some cash concerns coming up for some of these farmers they need to move some money. I mean, that’s that’s part of the issue. I think too. I think they’re they’re backed into a corner”
Oliver Sloup:
“100% And we know that the funds have a massive net short position but you and I’ve talked about it before the farmer has an even bigger net long position still with corn in the bin and it’s a tug of war battle here and unfortunately the funds are in the driver’s seat for the time being”
Scott Shellady:
“Alright, stay there. We’re gonna go away we’re gonna pay some bills. We’re going to come back and talk more with Oliver slope. He’s with blue line futures he’s in Chicago”