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Thursday, January 10, 2013

Accumulation in Grains

The message of the market in grains (corn, wheat, beans) has been accumulation for weeks.  For example, corn has risen from number 33 (-9% DI reading) on 12/04 to 10 (43% DI) as of 12/31 (table).  Corn moving up the table says the invisible hand is accumulating.


Table: COT F&O Diffusion


When corn's DI reading climbs above 60% (chart), the market will be saying "hey look at corn" regardless of what the experts saying.

Chart:   Corn (CORN) And Corn Diffusion Index (DI)


Wheat looks similar to corn.

What's all of this telling us? Hard to say at this point as reasons tend to become obvious well after the fact. Easiest explanation would be demand will outstrip supply in 2013.

Headline: No big rally for corn, wheat, soybeans

Just a week ago traders of farm commodities were rushing to predict a spike in market activity and prices following Congressional action to avert the “fiscal cliff.”

Whoa, not so fast.

Within a couple days of the immediate investing euphoria that followed, commodity analysts began pulling in those bullish horns as farm products — grains in particular — faded rather than surged.

Among those taking a new stance was Darin Newsom, senior analyst for Omaha, Neb.-based DTN.

“Since then, the markets have changed their tune,” Newsom said Friday in a telephone interview from Omaha. “Does it change things over the long range? Not really.

“But we’ve had gold, silver and other investments show gains and some of those are taking money out of commodities.”

Source:  more

Headline:  Not Even Close: 2012 Was Hottest Ever in U.S.

The numbers are in: 2012, the year of a surreal March heat wave, a severe drought in the Corn Belt and a huge storm that caused broad devastation in the Middle Atlantic States, turns out to have been the hottest year ever recorded in the contiguous United States.

How hot was it? The temperature differences between years are usually measured in fractions of a degree, but last year’s 55.3 degree average demolished the previous record, set in 1998, by a full degree Fahrenheit.

Source:  more


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