- There is no point worrying about markets today, Tuesday, November 3. We learned that a week ago following Brazil's presidential election.
- Given this, the more important debate we can have today, National Sandwich Day in the United States (among other things) is if a hot dog is a sandwich.
- The Grains sector was quiet overnight, as one would expect.
Morning Summary: A topic that often comes up when visiting with my longtime friend and host of RFD-TV’s Market Day Report Tony St. James is “What Day is Today”. What I mean by this is, and my apologies to those of you outside the US, someone in the United States (maybe, but who knows) has assigned each day of the year (possibly?) to be National Something Day. Maybe it is National Coffee Day, or National Chocolate Chip Cookie Day, and so on. A quick search pre-dawn Tuesday tells me November 3 is National Sandwich Day. Tony might ask me this morning (my weekly Tuesday appearance is at 8:15 CT) what my favorite sandwich is. There are so many to choose from, but for the sake of today’s discussion I’ll go with: 1) Reuben 2) Hamburger and 3) Hot Dog. (The last one is added just to spark the age-old argument because if we are going to debate something today, of all days, it should be if a hot dog is a sandwich. I’ll leave the rest to others.) You may be wondering about markets. It’s useless to worry about them today, and maybe the rest of the week. But in the end, it will get sorted out, so Happy National Sandwich Day everyone!
Corn: The corn market was quietly in the red early Tuesday morning. And when I say quietly, the December issue (ZCZ26) registered fewer than 20,000 contracts changing hands overnight, as of this writing. As we head into the last day of the Tuesday-to-Tuesday positioning week, December is down 2.0 cents from last Tuesday’s settlement of $4.4875. But that will change over the course of the day. Or maybe King Corn just gorges on sandwiches today and sleeps through most of the session, waiting for all hades to break loose tonight, or tomorrow, or possibly never. It’s hard to say. I don’t know what is going to happen, nobody does, but what I do know is when the closing bell sounds Friday afternoon the US corn market should still be fundamentally neutral (futures spreads) to bearish (basis) and technically mixed (long-term bearish, intermediate and short term possibly still oversold). But we will see. There’s no need worrying about it this morning. Today is a good day to turn off markets, social media, news, and get out and enjoy the day[i], even if as a friend from central Nebraska said Monday about the weather, “This is what it must be like living in Seattle.”
Soybeans: The soybean market might’ve seen a little Turnaround Tuesday activity overnight, or maybe Monday’s opening week and month salvo of a double-digit selloff was enough to spark some interest from the world’s largest buyer. We’ll find out later this morning. Maybe. If not, we’ll do something else. Recall from Monday’s Afternoon Commentary the January issue (ZSF27) lost as much as 18.75 cents before closing 17.5 cents lower for the day. Additionally, January lost 0.25 cent to March which lost 0.75 cent to May which lost 1.75 cents to July, the combination telling us there was some light commercial selling thrown into the mix to start the week. As for noncommercial traders, the January issue was down 26.25 cents for the positioning week at yesterday’s close indicating funds were continuing to liquidate some of the remaining net-long futures position. However, that isn’t what the CME website is showing early Tuesday morning with total open interest increasing by about 9,500 contracts and January adding 5,450 contracts Monday. These numbers indicate commercial interests were adding short hedges and/or funds were adding short futures positions. Given national average basis firmed versus the January issue, I’m leaning toward Watson increasing its short futures position during yesterday’s selloff.
Wheat: The wheat sub-sector was in the red early Tuesday morning. As I’ve often said, it makes no difference where wheat markets sit pre-dawn, or any market for that matter, given the only price that matters is the close (The Wilhelmi Element). And if we add in the Goldilocks Principle, then the only price that matters is the weekly close, so there’s no need to worry about wheat until Friday afternoon. That being said, and for the sake of filling some time and space, I’ll mention that today is the end of the latest positioning week. (For now, until CFTC moves to twice a week releases by December.) Therefore, I suppose, we can talk about what Watson has been up to after moving to net-short futures positions in all three wheat markets as of Tuesday, October 27. This was the first time for that particular trifecta since Tuesday, July 7. At Monday’s close December SRW (ZWZ26) was down 3.75 cents for the positioning week while Dec HRW (KEZ26) was off 4.5 cents and December HRS (MWZ26) was 2.75 cents lower. This tells us Watson has likely increased its net-short futures positions in all three markets, but not by much. Let’s see how today ends.
[i] I will be putting some of the final touches on the book I’ve been working on for over 20 years, all while listening to The Rolling Stones, Credence Clearwater Revival, and whoever else I can find on my old man playlist.
On the date of publication, Darin Newsom did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.