Farewell To Bearish July
This appears to be another one of those “I hate commodities” Monday mornings, as we have pretty broad-based selling. Grains, energies, and most soft markets are under pressure, but the real damage has been reserved for the gold market.
I traveled 1,400 miles over the past couple days, with a portion of that traversing Nebraska, Iowa, and Illinois. Unfortunately, I have to report that the poorest looking crops seen were from the Mississippi River east into northern Illinois. In fact, Iowa and Nebraska look great. Gauging from the DSMG virtual crop tour this past week, it does sound as if outside of the areas in Illinois, Indiana, and Ohio that have suffered from the extreme moisture, that assessment would be pretty close.
Weather and reports are the topics du jour. Albeit at a reduced rate it, would appear that rains will continue to fall across the southern reaches of the Midwest as we move into the first week of July. With some areas already receiving 400% plus of normal in the past few weeks, any is too much. On the other side of the coin, those west of the Rockies extending all the way to Canada have been experiencing a record heat wave, along with France and parts of Eastern Europe.
We witnessed another solid round of short covering in grain markets yesterday and for a while at least, the same in beans. It would appear that the fund bear has grown increasingly uncomfortable with the short positions they were holding in front of the upcoming reports and have elected to or, in some case, were forced to elect a move for the exit. Realistically, the only news of substance right now is weather. At this time of year, it really is the most important topic.