Dead cat Friday? Feels like it to me. The bounce is not enthusiastic nor is it much of one, but at least it is a bounce. The biggest indicator to me of a bearish move is the nearly 10 cent reversal move in the N/X bean spread in 24 hours. On Wed. the inverse hit 10 cents and by the close yesterday it was at even money. This a.m. we have moved back to around a ½ cent to a penny inverse on the rally. Crush, cancellations that are expected with the currency move and the additional acreage for beans from the weather, all add up to a major headwind for beans to fight to climb a steep hill created by the HUGE SA crop that is nearly harvested. Argentina is over 70% done now and exports are picking up. Both Brazil and Argentina are well ahead of last year’s pace on exports and have a lot left to move. The close turned all the complex technical outlooks negative. A nice volume day for a change on the drop and we added nice amounts of OI across the complex. More interesting was the huge increase in OI on bean options bringing OI to nearly even with futures. Look for the bounce to encounter some selling during the session and some pressure to see if they can hit some stops on the downside. I will be surprised if we don’t close lower.
Unless otherwise noted, the posts on this blog should be construed as market commentary, merely observing economic, political and/or market conditions, and not intended to refer to any particular trading strategy, promotional element or quality of service provided by INTL FCStone Inc. or its subsidiaries. INTL FCStone Inc. is not responsible for any trading decisions taken by persons viewing this material. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. These materials represent the opinions and viewpoints of the author, and do not necessarily reflect the viewpoints and trading strategies employed by INTL FCStone Inc. or its subsidiaries. Reproduction without authorization is prohibited. All rights reserved.