Progressive Futures -- Update

Thursday July 31st - Short tonight as nothing has changed from what we suggested

Corn - We said last night to get sold any corn you need to sell over the next few weeks at $6.10 in corn. We did that today so clean up sales should be done. There will be good heat over the weekend but it is short lived so unless something drastic changes for beans, corn will move lower. Longer term, corn will give us a good buying chance at lower levels for a bounce later this year. The battle for acres will resume for 2009.

Wheat – A little lower. We bought the wheat corn spread for buybacks at $1.97 just hold them for now. I am doing this 25% chunks so I am in 50% of my buy back right here.

Beans – Rallied late to finish down 1 but here tonight it's off 18. Still a weather market and I still would be sold on anything you need to move next week.

Rice – Holding support at $16.76 to $16.80. We have another few weeks for it to hold this level before we are comfortable in buying it.

Cotton- Nothing new. Sill under resistance.

Natural Gas – No follow through to the reversal but we are getting some indications that the market is working on a low. We would not be selling here and if I were short I would take profits. We may finish August and September purchases very soon here but the market needs to show us a little more first.

Crude Oil - Lower after the big run up yesterday. $120.80 needs to hold for the bulls near term.

Gold - Up $10.00 but no change as market below 9 week moving average for third day.

Dow - Down 206 on un-employment. Tomorrows number may be really bad.

Cattle – Wow...I said last night that cattle was a follower but that will change...well t did today but I am not sure it means anything just yet. Cattle higher with corn down 14. Lets see if it is just a delayed reaction.

Wednesday July 30th -

Corn - Higher today as more concern over heat keeps the sellers away and do not kid yourself, the sellers are not selling more than the bulls are buying. My concern is that the longer term forecasts do not hold this heat and if the market turns lower we could sell off right back toward the recent lows and even lower. There is also talk of the decision to not allow reserve acres out as being bullish but my feeling is that is more bullish for wheat right here than corn. In any event, the market is working higher slowly but I am not convinced this is going to last too long.

While this run could last a few more days, as we go along the bears are going to get a little more sure that this is a rally to be sold. Seller over the next two weeks should clean up some of their sales here if the market drops under $6.10 in December.

Wheat – Another negative day and another day where corn gained on wheat as did the beans. We are ready to add to our long wheat, shorn corn but need to see it turn. That spread is under $2.00 and could take off for $3.00 over the next two months. There is risk in this trade so it is not for everyone.

Beans – Up 14 in November today and the story is the same as in the corn. The weather is still in play but we are now headed in August and there needs to be some signs of supply reduction in order to take these markets sharply higher. If you are going to sell beans in the next 10 days, you need to watch this market like a hawk. If the market trades under $13.93 tomorrow, we would sell some of what you need to.

Today was a trend day higher which is a day where the market made new highs throughout the day. That points to a higher market near term. The only place to sell is today's low on the longer range charts but the 30 minute chart gives us a place where the market may be in trouble and that is $13.93. This is for farmers selling beans over the next ten days but I want to add, this is a weather market and technical indicators are not that accurate in market like this.

Rice – Up 5 as the market still unwinds volatility. In the middle of May, rise was trading an average of 85 cents a day and now it is down to 37 cents. Yesterday's range was 28. I like to look at that because when you have several days under the average and then get a day over the average, it means more. For instance, the range on Monday was well over the current average when there was a 54 cent range. The day was bearish by the way and the market has not traded very well since then. $16.76 to $16.80 remains support.

Cotton- Down a little after the spike higher yesterday. We are still against the resistance points in December cotton.

Natural Gas – A key reversal up in September Nat Gas today. If there is follow through higher, the technical action will be a signal to look for a bounce from oversold levels.

Crude Oil - Higher today as the battle over demand destruction continues. For me, I will watch the technical indicators for signs the a low is in place.

Gold - Down sharply and under the 9 week average. Let's see if the market follows through with selling tomorrow.

Dow - Up 186 as the market looks at some good news.

Cattle – Up 80 again along with corn....as I said it is a follower of the grains right now. That will change.

Tuesday July 29th -

Corn - Up 12 today as the market looks at increased demand, weather concerns, and an oversold situation. An August rally is possible but again we will want to sell it on a bounce especially if you need to move corn before November.

Wheat – Lower again today as concerns regarding the CFTC meeting is keeping buyers away. Dumb reason but hey, I have seen dumber reasons. In any event, this break in wheat is a great buying opportunity longer term. We will wait or the wheat / corn spread to turn and then buy another chunk of our position.

Beans – Down 5 looking at weather but the market was well off the lows. August is a big month and anything can happen.

Rice – Lower again and right on major support. A break into new lows sets up a down draft to $16.00 in November.

Cotton- A spike lower turned higher today. This is looking interesting. A close over the 9 week moving average will turn the market into bullish setup.

Natural Gas – Lower but with crude down over $3.00 it looks like Nat Gas is holding up pretty well. I you missed it last night, below is what happens when there are three named storms in July.

1933 - 3 storms in July ended with 21 storms, 10 Hurricanes and 5 of them were Major Hurricanes
1944 - 3 storms in July ended with 11 storms, 7 Hurricanes and 3 of them were Major Hurricanes
1966 - 4 storms in July ended with 11 storms, 7 Hurricanes and 3 of them were Major Hurricanes
1995 - 4 storms in July ended with 19 storms, 11 Hurricanes and 5 of them were Major Hurricanes
1997 - 4 storms in July ended with 8 storms, 3 Hurricanes and 1 of them were Major Hurricanes
2005 - 5 storms in July ended with 28 storms, 15 Hurricanes and 7 of them were Major Hurricanes

For now we will stay clear of pushing the market on the shot side.

Crude Oil - Down over $2.50. Can it go under $110.00?? There is a lot that needs to happen but if the demand destruction is as bad as some believe, we will test it anyway.

Gold - December was down sharply today as the dollar rose. Has the dollar bottomed...yep it has but where is the green back going? Near term the Euro could fall to 1.50 but let me warn you. The US debt is going to come back on this rate.

Dow - Down 240 yesterday and up 266 today. Nothing to do here but watch.

Cattle – Up 80 as corn rallied. It still is a follower.

Monday July 28th -

Corn - Once again the flip-flop is on as heat just to the South West of the Corn Belt is trying to move in and disrupt a perfect crop growing there. I doubt we get a lot of damage but the main concern must be the beans. If they get hurt in August, corn will not be going much lower even with a 155 bu. average yield. Even so, I am not a weather forecaster so we will wait for more information and hope we get a bounce to sell. Also, you should read the Natural Gas comments tonight because Hurricanes can have an impact on corn given the energy connection.

Wheat – Ouch...The wheat/corn spread collapsed today as major selling in wheat took the market lower early and held it down. The market needs to see more selling tomorrow to hold up the reversal. One thing to note is that the market broke back off the 9 week Moving Average which seems to be a major pivot point so the selling may have been profit taking against a possible technical resistance point. A move higher tomorrow will indicate another test of the average and seasonally, we see little risk here. We will hold the wheat/corn spread for now.

Beans – It is a weather market so there is not much more to say. I am a technical trader but in a market like this, such analysis is useless because it is all up to mother nature.

Rice – Up 44 after the night session ended but only up 7 when the day was done. Sideways at best but the technical action remains bearish.

Cotton- Down 1.03 today and I see no reason to do anything new. Still sideways looking at other markets.

Natural Gas – No sign of new weather problems in the tropics but its not far away. July has been very busy and in fact in recorded history it ranks tied for 5th as the most active July on record. What happens when its this active this early...you don't want to know. Here is the record...

In 1997 it was the best of years but the average is 16 storms throwing out 2005 and 1997. That means 13 more storms to go and at least 8 hurricanes with an average of 4 being Major hurricanes. Do you want to be short Natural Gas? Not me....

There is too much risk here to be short Nat Gas right now. After the season maybe, we will have to see where we are then but right here, I see no reason to push the short side.

Crude Oil - Up $1.50 on worries about supply. The bears are all out in force right now talking this market down and maybe they are right but its hard to believe we think that $100 crude is cheap anymore.

Gold - Up a little as it seems the path of least resistance is higher. The dollar was a bit lower today so that nmay have helped keep the pressure off.

Dow - Down 240 today as the market looks to be testing support.

Cattle – Down a little today but the market was under pressure most of the session thanks to the Cattle on Feed report. Corn not holding overnight gains helped the cattle work lower as well. The trend is still down but right against support and the numbers are not supportive of a major break; however, corn falling under $5.50 will move cattle toward the $1.00 mark.

Sunday Night July 27th -

Corn - Corn is up 8 cents in the overnight trade...the weather models are heating up 10 to 15 days out and that has traders a little nervous and especially in beans. Remember, beans will take the lead and as I type this they are up 25 cents in the overnight trade. We will see how the morning trade looks but here is the thing, we will sell this bounce. Unless there is severe heat and a quick dry drown to affect the cup weight of corn in the Mid-west, this market will sell right back off so do not get extremely bullish just yet. We may get 3 days of up action or 10 or just 1. It will end suddenly if it ends in the next 5 days. If we can hold this heat together for about 21 days, this will get extremely exciting and the market will move sharply higher following beans. It is all up to the weather now.

Wheat – We went right back into our wheat / corn spread as we said we would do if we got the signal. We will hold that for now. As I type this wheat is up 16 cents and sitting right on the 9 week moving average.

Beans – We have been saying we could get a weather scare here. The seasonal tendencies are helping here too. The fact is we have seen major damage to the bean crop after August 1st and huge rallies. They are rare but the point is they are possible and traders know that. If this weather forecast holds we are going to get a nice move higher but if the weather models flip right back to cool and wet, we will move down and make new lows.

Rice – Up 24 in the overnight session. Remember that $17.40 support zone in November. Well now it is resistance and the market is just 16 cents away form it. 2 closes over that level will turn this market right back up as rice may follow the beans near term.

Cotton- Cotton closed over its 9 week moving average on Friday. If the grains keep working higher, cotton will follow.

Natural Gas – We are up 12 here tonight as Nat Gas is looking at the same weather forecasts as the grains. If we get more forecasts calling for heat and especially if the American Model flips back in the morning, then a major heat wave into the Mid-West will point to higher Gas prices and with the market oversold down here like it is, look out for a major bounce.

Crude Oil - September Crude is at $123 tonight. We will be looking at this one closely tomorrow morning as well.

Gold - Up $3.80 after the reversal last Thursday and follow through Friday. The dollar is a little higher here tonight so we could see more pressure against the gold to keep it from moving sharply higher but it still looks ok.

Dow - Up 21 on Friday. Not too exciting and maybe headed to test support.

Cattle – The Cattle on Feed report was a little bearish but I doubt the market cares if the grains open sharply higher. Believe it or not, this market is in a weather watch as well.

Thursday July 24th -

Corn - This will be short and sweet. We call this an inside day as the market never got out of yesterday's range. The high today is another lower high that has occurred over and over the last 13 days. The Market is oversold with a PB at 20% and that won't change much until we take out some previous days highs. Do not be surprised to see another dip here before we finish off the selling. Read Monday nights comments because they are still very valid.

Wheat – A 16 cent range and ending up 4 with the wheat/corn spread improving 3 cents. I don't think this one wants to go down much near term but if it does, it is a buy. Demand is surfacing and we are now intering the demand phase for wheat.

Beans – Market rallies about 14 cents in the last minute but still finished off 11 at the close. No change in my books as I will sell a good rally and hopefully we will get one.

Rice – Down 6 at the close as rice ran out of sellers. Near term anything can happen and we are out looking for a reason to be in. There isn't a good reason right now.

Cotton- Up 104 and headed for the upward side of the resistance channel. Dolly is having some affect but once the sun is our, that affect is usually gone along with the gain in prices.

Natural Gas – A sharply lower move today but we finished well off the lows. The funds are still selling this one and today they really came for it. The injection report was not that bearish but it wasn't bullish either. We dropped under $9.00 for a time and let us get more Nat Gas bought for end users. Yes it can go to $8.00 but we will buy it all the way down because it can also go back to $12.00.

Crude Oil - Up 1.17 as I type this. A move under $120 is still possible near term but we should be looking for a turning signal as well.

Gold - A reversal back up today in gold. The dollar is higher but well off the highs of the day. A move under $925 is an out right sell signal.

Dow - Down 283... We could easily test the lows again.

Cattle – Up 37 with a big report tomorrow. Most think it will still show lower cattle on feed than last year. We will look at those numbers before we do anything different.

Wednesday July 23rd -

Corn - From this morning's comments... "One thing I am sure of is that we are creating a huge void of selling above the market. By that I mean when this thing stops going down, it will not give anyone time to own it as it reverses to find the sellers. This volatility is not that surprising as we have been saying for the past two years the grain markets volatility will be like we have never seen."

What a day!!! Down 29 early only to rally 44 cents and then fall back 16 to finish down just over 1 cent on the day. This is a spike reversal and sets up a test to find resistance. For now, the support is at today's low and the resistance is at today's high but the buyers found little to buy on the run from sharply lower levels today. Volume was extremely slim during the move to unchanged and didn't pick up until we were 10 to 12 higher on the day. The the buyers gave way as the sellers took it back down. Now we have to wait and see which area, today's low or today's high is violated first.

Just who is in control right now? Some would say the bears but I am not so sure. I think the market may dip back down but if we run out of sellers over the next two days and cannot take out today's lows, there is some pent up buying demand that could bring in a sharp rally over the next couple of weeks. Nothing new from us, sellers don't sell and buyers should wait to see if the market can take out the high today of $6.08 in the December contract.

Wheat – We dumped all of our wheat/corn spread today as wheat shows weakness from the unwinding of that spread by the big boys. December wheat can move toward $7.70 to $7.80 but once again, I will own that spread if we get the Dec wheat that low in Chicago.

Beans – Heavy selling of beans against corn. I am not doing that just yet and I know it is a mistake. I have already stated I do not like the beans here at all but it is still the wrong time to be a big seller. We will wade in further in the next few weeks but will give it some room.

Rice – Limit down today and as I type this it is another 23 cents lower. We got out of all long hedges today and that leaves us naked sellers in the cash market at $19.00. We will own some later. I expect a better chance to own it as we head into harvest. By the way, Texas harvest is underway and yields are up from last year in the very early results we have heard.

Cotton- Up 112 today and still sideways.

Natural Gas – Lower as Crude gave up today on Gasoline inventories are going up. Still no sign of a low here so let her rip. $9.00 is not that far away now. Weather is the big thing to watch here.

Crude Oil - Down almost $4.00 as signs of lower demand are hitting the market. Lower prices increase demand however so hedgers need to keep an eye on this one.

Gold - Big hit today as the dollar strengthens. It looks like bottom for the green back.

Dow -Up 29. A lot of good news out there but still, sales are not going to be through the roof from early reports. No reason to own it.

Cattle – Big hook reversal up today. We need follow through for an indication that we have reached major support. Tomorrow will tell us a lot.

Tuesday July 22nd -

Corn - Another bad day as corn falls below support and runs stops. Based on the close, this is not over yet. Read last nights in-depth comments as nothing has changed.

Wheat – This morning I said what might start telling us that corn is about to bottom if wheat starts pulling away from the yellow grain. We had a technical reversal today and finished higher but now we need follow through. If corn bounces tomorrow we could get more of a move here as this one sets up a sideways trading range again. We remain in the wheat/corn bull spread on half of our position and what a good one it has been. $8.10 is major support now with $8.59 major resistance.

Beans – A reversal here today so all we need now is follow through in the November tomorrow. In the process we need today's high to be taken out. That will be the signal to the technicians to buy the market. We still have a way to go but the market started showing us today that it will not follow corn any longer. We do need a higher close tomorrow to make the point stick.

Rice – Nasty closes here as rice finishes down 32 to 34 cents. We are 11 away from major support in November and needs to hold. I am beginning to think it will not. The only hope for rice rests with corn turning higher tomorrow and the beans and wheat moving sharply higher.

Cotton- Still holding but no reason to own it yet.

Natural Gas – Sharply lower early in the session but we saw the break trimmed a little by the end of the session. We traded under $10.00 early in the day before closing back over that level and with ideas of more economic woes ahead, we could still head lower here. As I said last night the technical indicators are now screaming that the oversold condition cannot sustain itself much longer. That doesn't mean we will not move sharply lower in the next few days and test support at $9.00. We still feel the funds are too short and the weather situation is still unsettled for the next 8 weeks but will wait for the market to tell us to own it.

Crude Oil - Down $3.00 today as the longs keep selling. No reason for them to stop yet.

Gold - Down big today as the dollar has strengthened a bit. The trend is still up but is being threatened.

Dow -Up 135 and 220 points off the lows. This is short covering and it could continue.

Cattle – No change in our books as we see cattle following corn. We did do one thing this morning for cattle feeders. We bought September corn and sold the 590 call against it for 25 cents. This locks in no better than $5.50 on 25% of our purchases over the next 4 weeks and at worst case we pull 45 cents of profit out of the market if it starts to rally over $6.15. This is a small trade and we may modify it but we wanted to start buying some feed needs for the next 4 weeks.

Monday July 21st -

Corn - Wake us up when this is over!!! That is what some farmers are saying tonight but hiding our heads in the sand will not help much as the market collapses looking for any support. It is all about supply and supply only right now. If you look at the USDA report for July and add 1 1/2 bushels to the acre for the US crop as some are suggesting, that sets our carryover at 1 billion bushels. There is no reason to think the USDA will not increase the yield based on the current conditions report which came out today showing another 1% increase in the good to excellent with no change in the poor to very poor which stands at 10%.

History says the USDA will increase the yield based on these numbers. How much is the question and frankly, if this holds, it may be more than what they are talking about. So lets take a look at what the actual crop condition report was at harvest last year when we had 151 bu. yield. Last October, the crop was rates at 63% good to excellent compared to 65% right now. We had a poor to very poor percentage of 14% compared to 10% today. We finished with 151 bushel yield. This indicates the USDA could actually raise this yield to 153 to 155. That would put 400 million bushels back into stocks or 1.2 billion bushels in the carryover. That is 400 million less then last years ending stocks and on December 1st 2007, December 2007 corn was trading at $3.95. So can we go back that low?

Relax we are not headed to $4.00. First, the 400 million bushel drop alone would extrapolate to $5.25 to $5.50. To get a handle on the value of corn and the current risk in the market, we need to answer some questions.

What will be the demand for corn going forward? Will it hold at the current forecast of 12.5 billion compared to 12.7 last year?

What is the real condition of the corn crop? Will it hold this good going into harvest? Will the yield reach 155 bu./ acre?

I must assume two things. The demand will not hold at the current level but will end up around 12.2 billion bushels and the crop will hold the current conditions. Yes I am aware that Corn conditions almost always go down in August. I am looking at a worst case scenario here for corn futures. The net affect of these two items is a carryover of 1.4 billion bushels at most (worst case) which does not forecast $7.00 corn but a range between $5.25 and $6.75 at harvest. This says there is still risk in the market; however, technical indicators say not to add to sales right now. Seasonal indicators say not to add to sales here. Fundamentals look to only get worse based on their current trend so that is saying to add to sales. What do we do???

The bottom line is this....we sold 50 to 75% a lot higher than the current price and later if we have to sell at these levels, we will probably get our chance. Even so, I will look for a bounce as the market knows all too well we are oversold, conditions usually fall during August and the crop is still behind and vulnerable to heat and frost. In addition, at this price acres will drop again in 2009 putting pressure on prices and we will go through this all over again. So near term we look for a bounce then a break into harvest and then....well we won't get too far ahead of ourselves but longer term, I just don't see a lot more risk.

Technically, we are against the major uptrend line and the current market is $1.15 from its longer term average. This is where history says the market exhausts the sellers. Time will tell but let me be clear, I am not suggesting anyone buy it here...HEAVENS NO!!!. I am suggesting sellers not sell. Big difference.

Wheat – Followed corn lower. I wouldn't be surprised if wheat doesn't tell us when this break in corn is over. In other words, it could bounce first. We are still in the wheat/corn spread after taking some off at $2.00. Its out to $2.07 right now. Buy backs in wheat outright are not recommended just yet.

Beans – Major drop again today as beans continue to see massive long liquidation. A bounce is certainly possible but there needs to be weather scare to take this one back sharply higher. We are 50% sold and will sell another bounce. I am not a big fan for beans and am really kicking myself for not selling more. Hind sight is certainly 20-20!!!

Rice – Lower today as September backed off the spread idea. $17.40 must hold in November or we are headed to $15.00.

Cotton- Holding like a rock. $70.80 is support and $77.00 is near term resistance. Volatility is dropping here.

Natural Gas – The storm idea has lost favor with traders as Dolly heads south of the Natural Gas platforms in the Gulf. With no weather concerns and just fundamentals, September Nat gas could push toward $10.00.

From a technical stand point, the market has pulled far from its longer term averages which in the past has been a deterrent to more downside volatility. Not that we cannot go lower but history says at this level of oversold conditions, pushing on the short side may not be the best thing.

Crude Oil - Over a two dollar rally today. Doesn't mean much as the market is still very jittery following the collapse the last several days. We could rally back to $140 and still be solidly in a down trend. With funds lowering their position in all of the commodities, this one may have more liquidation to go.

Gold - Nothing new here. The trend up is still intact. A move over $980 is an indicator for $1000 and soon.

Dow -Down 29 but this rally has no legs. Look for it lower near term.

Cattle – We have found a little support here. Emphasis on "a little". I still see it following corn; however, the break in feed costs has certainly benefited cattle feeders. Cattle and hog producers a like will be looking for more downside near term and then looking to start locking in profits that appear to be there right now. Be careful when thinking too bearish grains here. Corn conditions almost always go down in August.

Friday July 19th -

Corn - Corn broke under heavy margin selling at the close and finished down 21 1/2 cents. The fact we saw this late break could be the first signs to indicate capitulation.

FRIDAY'S BIG PICTURE - The trend is now firmly down. PB is at 29% the lowest since last October. Over the last 10 trading days the market has dropped over $1.50 and is oversold. Long-term, even with 150 bu. yield the carryover levels will drop to very low levels setting up another year of needing to buy acres for corn. The chart is in a steep down trend and against the bottom of a well defined channel with major support at $6.00 in the December. We sold right but if you didn't, and I know many who didn't...do not be adding to sales right here. The risk is another 30 cents but a strong bounce is possible because this one is not over yet. Current forecasts do not show anything threatening the corn yield which means that a surprise to the market will be a bullish one not bearish. Again, if you missed our sale recommendations, do not sell here. That is not a reason to buy it here either.

Wheat – December broke 10 cent sin the last minute and finished off 5 for the day. We traded across our $2.00 objective in the wheat / corn spread and so we took half our positions off at that level. With corn oversold, this spread could go back to under $1.90 sometime next week.

FRIDAY'S BIG PICTURE - I still see it as sideways and I am not believing all the good news on the world wheat crop. Not that I don't believe its good but the fact is it is too good. PB is at 47% with no real push one way of the other. Major support is at $7.60 in December with resistance at $8.60. That is a big spread and why I am trading wheat with the corn for right now. Longer-term we look for demand and countries who got stung last year, looking to add more inventory so a good demand phase is setting up. I also look for more acres of wheat next year.

Beans – Down 50 as more pressure on good weather and Argentina saying it will allow sales with no export tax. That should make consuming countries breath easier as there is a bigger supply of beans on the market...for now. Today's close is the first close under the upward trend line so techs will be watching the close on Monday. If it is sharply lower, we could have even more selling. Farmers who have not gotten to our 50% sold level should be looking at Monday's close and if it looks like we are closing lower, get to that level. We may get to 75% sold for those who will use futures.

FRIDAY'S BIG PICTURE - The trend is higher but could change on Monday with a lower close. PB is at 38% so it is saying we are in a down trend. This is normally the time of year when we look for a top in beans and we certainly seem to have one. Longer term, we are not a big fan of beans either. Farmers who need to lower risk will be looking at planting more beans and less corn based on input costs. We are in sell rally mode until something really affects the size of this crop.

Rice – Down 5 in Sept and down 15 in Nov. as traders want to narrow the spread a bit. Makes some sense with July going off the board at such a premium. Sept could go positive to November so if you want to trade the spread, go ahead as the risk is about 12 cents.

FRIDAY'S BIG PICTURE - The trend here is now sideways in our book but hugging support. PB is at 37% but the market has held recent support at $17.80. Longer-term we still like the market because the same conditions that led to higher prices last year could do the same this year once we get into the Demand phase of the market. Even so, that is longer term and we could drift lower into the harvest if yields are not threatened. I have already addressed the government report which many feel is wrong. Until the reports change, this market will follow those numbers.

Cotton- Down 38 today and still sideways. Support at 70.80 needs to hold.

FRIDAY'S BIG PICTURE - Sideways trend with PB at 41%. Longer-term I still think the market will need to buy acres and at this price hasn't begun to do so.

Natural Gas – Up 12 cents after a major free fall this week. When this one gave up it gave up. Once crude fell apart so did natural gas. The problem here is weather perception. The market has forgotten what a hurricane can do the infrastructure and if we start to see in the gulf, the market could put a lot of damage premium in it very fast. PB is at 20% so we are way oversold and with a tropical storm headed for the slot and right now set to move toward Texas, I expect the selling to dry up big time come Monday morning.

FRIDAY'S BIG PICTURE - Longer term the market is tied to demand and the economy slowing is certainly going to cut into demand. Even so, over time I expect the BTU difference in Crude and Nat Gas to slowly pull the Gas up with crude. It may take a long time but it will start and grind out. With the funds short Natural Gas as their hedge against Crude and the products, the market remain vulnerable to major spikes up.

Crude Oil - Down 40 today and another close under $130.00. $16.00 in three days tells the story here. The trend has shifted to down but it could be the shortest down trend in history.

FRIDAY'S BIG PICTURE - PB is at 40% after all of the selling this week. What should crude be trading at? $100.00 could be the target if we have no hurricane season at all. Right now that seems unlikely with a lot of activity here in July and the main season dead ahead. Longer term is tied to the economy somewhat but it is a global market and we could see strong hand buying on this leg down.

Gold - Gold has not broken like the energy and grains but it doesn't have the upward momentum they had either. Even so, down $13.00 and the luster of $1000 gold is not there right now with the markets on the defensive everywhere.

FRIDAY'S BIG PICTURE - Trend is still higher with a 61% PB. Major support is at $907 on the nine week moving average so there is room for a break and the market still look ok.

Dow -Up 49 This bounce may have a bit further to go but it really is not going anywhere.

FRIDAY'S BIG PICTURE - The trend is decidedly down. In out last big picture we said to look for a bounce to correct some of the nastiness in the Dow. Nothing has changed for us. The bad news of the recession has not come across the earnings wires yet and as it does, we may see a grinding lower leg take us to the 10,600 level. We got over 1100 points away from the 9 week moving average but that has narrowed to 500 points tonight.

Cattle – Up 30. We have fallen under our support level and looking to see if the 104 level holds. We think it will near term.

FRIDAY'S BIG PICTURE - PB is at 28% with the market now $3.20 cents away from its 9 week moving average and firmly in a down trend. Cattle numbers are not growing so the idea of lower demand, while bearish, is offset by the actual numbers available. Corn prices will have more of an impact longer term so it looks like cattle will follow corn into the 4th quarter.

Thursday July 17th - -

Corn - "but remember, if this heat idea turns out bogus, the selling will intensify." That is how I ended last nights comments and boy did they intensify. Huge selling with little buying dropped corn down 27 cents today as the reversal yesterday was gobbled up by technical selling as well as fund liquidation. I wish I could tell you support was just a couple of cents away but the real support here is 40 cents away and with crude in free fall as well, I am not sure the timid support right here at $6.40 in December is going to hold. The trend line off the March and May lows was busted in the reversal yesterday but today's close is 12 cents under that old trend line so the next stop is the major trend line at $6.08 in December.

Hopefully you have followed our advice and in some cases I hope you sold more than we were wanting to sell. I felt like the odds were still with us for a weather bounce and we may still get one but boy the forecasts had better start changing fast.

There is not much more for me to add here but to say the selling here is fear but it can run and run and run. $6.00 in December corn is not at all out of the question. I think $5.00 is!!!

Wheat – Up big yesterday...down big today. The only thing I have been wanting to do here is buy wheat and sell corn. I don't want to add right now . We started at $1.53 up to $1.60 and it is $1.81 tonight. $2.00 is my target but in all of this commotion, corn is getting a little too low for me to start pushing corn down on wheat. If we get some support in corn and wheat starts higher, then I might add some for an even bigger spread but right now I am in a holding pattern. At $1.85 I will lighten my load back to 25% which is half of what I am in right now.

Beans – We are 50% sold here and now hoping to get a chance to get more sold. If you are using futures on another 25%, read the following CAREFULLY!!!

Support is at $14.70 and it just should not go below that unless we are headed to $12.00. The first line of support starts at $14.88 with what I call COLOSSAL support at $14.80. If we drop under $14.80 a tremendous amount of sell stops are going to get hit and I mean HUGE. Shorts may well be pushing for that very thing to happen. I think this will be a "wipe out" event and when that selling stops under $14.80, whereever it is, this market should be bought for a very strong bounce. If you cannot watch it here is what you might think about trying. Put an order in to buy at $14.72 on half of your short and $14.62 on the other half. I would only think about this if I were short. If I was wanting to take a shot at the long side....I might buy the $14.80 call and sell the $15.80 if the $14.80 level is taken out and I mean I might do it right after that level is violated. The market will be trying to cover those huge stops and the calls may get very cheap.

Again, that is what I am thinking about doing....

Rice – Good export numbers but no real reason for the market to work higher. In fact, we might see weakness tomorrow based on the grains revaluation.

Natural Gas – Massive break today as Natural Gas implodes on ideas that a slowing economy means a lot lower demand. Here is the thing, a lower price means more demand not less and this break is probably as bogus as a $5.00 bill...got you didn't I ??? Ok...so a $5.00 bill is not bogus, maybe neither is this break??? I said this to make a point. Demand is not the issue, heck, supply is not the issue., The issue now is that the funds are running from all commodities as fast as they can because they are under huge pressure to liquidate. This will allow many commodities to go under value. Nat Gas is one of them.

We were going to go into a scale down buying program and in g=fact started with what we need on a small amount but once I saw the charts fail to support where they should, it was pull off the buying program and wait this out time for me. As the funds liquidate, buyers are going to become more the "in cat bird seat buyers" and sellers are going to remember the old phrase, be careful what you wish for....

For now, we will wait this out but the first sign of a tropical storm and I will pull the trigger faster than you can make a $3.00 bill.

Crude Oil - Down $16.00 in three days. That is a correction and a major top. Things should get better at the pump and on wall street for a little while until people realize demand is causing this move not speculators. Long term I want to own this but closer to $120. Might not get it but I can wish for it...(read natural gas comments)

Gold - Higher??? Talk about specs moving a market.... I still see it at $1000.

Dow - Up 207 but don't get all caught up in the bottom is in. There is more pain to go.

Cattle – Well here we go. I said last Friday we had a $3.00 risk and we have covered that. $107.50 is support and it barely held today. With the liquidation in the grains, we could see more than I was ever expecting as the market falls on funds getting out of the way of the guns in congress.

Wednesday July 16th - -

Corn - The oversold condition of the market added to the strength of the reversal today as weather forecasts are changing to put heat into the Mid-west right when pollination is occurring. Are those forecast right? I don't know. All I know is the market cannot stand any more reduction in yield potential I always like to see 4 weather model run showing something like this and it helps if all the weather models agree. So far that has not been the case as one the biggies tonight has dropped the dome idea off. Like I said...who knows. We will watch it again tomorrow but remember, if this heat idea turns out bogus, the selling will intensify.

Wheat – OK... I didn't see this coming at all. Wheat dropped under support overnight and looks to be down hard and with corn oversold, I expected corn to hold while wheat caved in and gave us a chance to add o the Wheat/Corn spread. Well it worked for about 15 minutes and then wheat began a strong advance on technical buying and some short covering. The harvest is about done so the pressure on he market is going away. Technically it is sideways but it wouldn't take much to put another $1.00 on this one.

Beans – We are 50% sold here believing the odds do not favor a major damaging heat wave; however, it certainly could happen. That is why we are 50% and not 100% sold. If this bounce can gain more traction e may setup to do more selling.

Rice – Still quiet. I am not doing anything he right now.

Natural Gas – Down just a tad today. We are looking at a possible rally cry if weather starts to look threatening. I am not sure how low they can push this until after September 15th.

Crude Oil - Traded below its 9 week moving average for the first time since Feb 8th. It didn't close here but the selling is sure strong right now. Lets see if the market doesn't quiet down a bit looking at other factors.

Gold - Lower today but looks like a correction not a top.

Dow - Up 276 as financial worries slide a little. This is the bounce we thought might happen and it could last a while.

Cattle – Lower on cash meat prices. The market still looks to be headed lower but not a lot.

Tuesday July 15th - -

General Comment -

A hard day down with beans off 40, corn off 15 and wheat down 7. Rice was down 10 in very quiet trade. Crude oil broke over $9.00 at one time and still finished with the largest down day since 1991.

We sold yesterday in corn and beans and added another 25% today when the support zone we told you about was violated at $15.45. That puts us 50% sold in beans and hoping we are wrong so we can sell the other 50% higher. The market is oversold so a bounce is possible but we need a major threat t the supply for beans to move back toward there highs. Right now the weather looks great. Sell rallies if you are not at our 50% level. .

The Wheat / Corn spread is working as advertised. If your not in, you might wait for some consolidation of the spread or a pull back toward $1.60 premium of wheat over corn. I have a target of $2.00

In Rice, it is sideways and dead as can be. A test of the lows is where I might buy in some protection but if November drops under $17.40, this one is headed to $16.00. I think the USDA numbers have enough concern from both bulls and nears that we stay right here until we get better news on the size of the crop.

Energy looks weak but we need another day down to confirm the top. Tomorrow will be key for Nat Gas and Oil. We have started buying Nat Gas on a scale down because that is the one energy market that has some real potential near term to work back higher and sharply higher. The tropics are blooming so it is jut a matter of time.

Monday July 14th - -

Corn - Corn was down hard today and here in the night session it is trying to hold its ground as it is up 2 and 5 off the lows after 10 minutes of trade. The chart has turned decisively bearish so any bounce needs to be sold. December could bounce to $6.93 and then about $7.05 but I expect selling to neutralize a bounce once we get the market balanced from its current oversold condition. We recommend selling corn anywhere in here near term especially if you are going to be selling the next two weeks.

As always, the weather could change but I don't see anything out there just yet to turn corn back higher. Beans could catch fire if the weather changes after August first. We will have to wait and see what happens there. But a bean rally will give us a chance to sell more corn in August and probably at higher levels. But the risk near term is down.

The crop condition report showed corn in the same shape this year as it was this time last year but improving instead of getting worse which is what it normally does this time of year. That indicates rallies should be sold near term.

Wheat – Down 13 as wheat watches corn and beans weaken. I still see this one as sideways as it starts to enter more into its demand phase. I still like owning the Wheat/Corn spread as well.

Beans – Hard day down today and the market is up 5 cents in the overnight session early. Weather can still be a problem but I can see farmers getting some beans on the books especially of we take out $15.45 in November. We would get to 25% sold right here if you aren't there and we get to 50% on a move under the support at $15.45.

Also a possible depression right up the slot is looking possible. Read Nat Gas below for more on this but we could see a pop in beans if this storm starts to track for the Gulf.

Rice – Unchanged on the day and here in the night session 16 minutes after it opened, there still has not been one trade. I see the market sideways and still am prone to buy it against support. The crop condition is not that bad as it is just a little worse than this time last year. That indicates the yield forecast by the USDA is not that far off so don't get caught up in poor crop conditions in Arkansas just yet. I don't doubt that conditions are bad but I don't think the market will trade that way just yet.

Natural Gas – A little hook reversal up today but nothing to get too excited about. While all eyes are on Bertha, a tropical wave number 94L may become a depression in the next day. Some models do not have it developing at all while others say it will become a depression. This storm is moving right toward the slot and if it strengthens will grab everyone's attention. I am buying Gas here for insurance but only a small amount and I will be quick to let it go.

$12.15 is good resistance and if August climbs above that I will go from 25% to 50% and at 12.65 I will go to 100% near term because something is happening if that takes place.

Crude Oil - Unchanged and holding. A storm entering the Gulf picture should be enough to move this one over $150.00 but so far no storm. Keep your eye on the tropics and do not be short if a depression forms.

Gold - No changes...I like the GLD fund here as I mentioned last week. We are long about 50% of our base position and $1000 is probably the next easy target.

Dow - Down 45 after starting higher. The Freddie Mac issue is serious and has wide spread complications. We may see another strong washout here before its all over with.

Cattle – A hard day down today. Last night I said we had a $3.00 risk, well we took 150 points of that today. We are nearing support so we will see how we trade there. With corn falling, there is little reason for cattle to hold here buy remember, cattle can't turn around that fast and I expect to find support here soon.

Friday July 11th - - Updated Sunday July 13th

Corn - As I type this on Sunday night the market is Down 15 cents. So much for the late rally from Friday. This puts the market in a major down trend and if you cannot or will not store corn, get to 100% sold now (Texas Only). If you are in the north get to 75% sold ASAP. The market has another 50 cents of risk in it. If you will use futures. Stay at 50%. From here on out, corn will be following soybeans.

For you short the $8.00 September call, we will buy them back at 1 cent and look to sell a lower call level when the time is right.

Wheat – Wheat was up 12 cents on Friday but here on Sunday night its down 9. Remember, we talked about the long wheat - short corn spread starting to work. Well it is in high gear. Look for $1.75 pretty soon on the spread so if you are long Wheat as a buy back, something we are not really ready to do, you can sell corn against it near term. We might wait for a correction in the spread first just to not have the draw down affect.

You should remember, there is still a weather market possible in the corn so a major break here is not likely in corn until we are sure the crop is made. Even so, I see the spread as good near term.

Beans – Down 30 cents here on Sunday night.

Friday was not a good day. Yes the market closed higher but as I wrote Friday evening, the action of the day was like a shot fired across the Bow of the bull trend. Many times you may see the market closing price as really important and it is but one should also look at just how the market got to that closing price. The action on Friday was volatile and looked like a market in the throws of a top. We could trade around here for days and even make new highs but it looks like beans could be signaling they are approaching a top and may have even made it.

I am not ready to call it THE top because this time of year can be tricky with the weather. There are many times beans make new highs going into August and we still have almost three weeks just to get there. Near term, we will be looking for someplace to lay off risk but its not right here. With that said $15.45 must hold or else we are going to go lower and test support at $14.70.

Rice – Limit down on Friday and down another 25 cents here on Sunday night. The report was bearish and the market still looks sideways so a test of support at $17.40 in September seems likely. One thing to remember is that the limit down move did not have a large number of contracts offered limit down so there is no panic selling here. The selling should be slow and steady with the question to be asked, why buy it here?

Let me say one more thing. Everything I read over this weekend and what I hear says that the USDA numbers are wrong. Sure... right!!! I have been doing this a long time and when everyone says the government numbers are wrong, that is the time to get taken to the cleaners. The market is traded by buyers and sellers and let me just say, the market is telling us they will follow the numbers. Can the numbers be wrong? In rice??? Absolutely...but the market can be wrong longer than you can remain financially solvent. I will wait for a reason to buy and the idea the government is wrong is not a reason to own it. Again, I speak from experience and a bank account that showed this to be the case more than once. I have learned my lesson.

Natural Gas – A massive key reversal down as we continue to see long liquidation based on no weather scare. Tonight the market is up 10 cents as I type this. I bought a small amount on Thursday and I will buy more on any break. Friday's high of $12.62 is major resistance and if that is taken out, I will load the boat.

Let me be clear...this is a weather trade only. With no hurricane we should see the market test $11.00 and I will start to buy some protection based on current chart work; however, if a hurricane enters the Gulf of Mexico this market will EXPLODE!!! If you want some cheap protection and try to make a small amount, look at UNG or buy the MiniNat Gas contract for September.

Crude Oil - After the strong push to new all time highs, crude came right back down and it looks to me we have found the top for crude right here. If we trade to $150.00 it will trade to at least $153 to $155 but we may not see the $150 mark for several months as the selling of Crude is heavy every time we enter new high territory. Given the world situation , we should have been able to hold the gains on Friday and we didn't. We are down $1.50 as I type this on Sunday night. Look to own it lower...hopefully, much lower.

Gold - I like the GLD fund here as I mentioned last week. We are long about 50% of our base position and $1000 is probably the next easy target.

Dow - Down 128 but its higher on Sunday night based on no bad news over the weekend and lower crude. Let's see. The market is going up on no bad news??? Think about it.

Cattle – While I do not see a huge risk to cow/calf operations, there is little doubt that this market has rolled over. Sell rallies if you want to do some trading. We have about a $3.00 risk in Dec Cattle.

Friday July 11th -

Quick General Comment - I will update this in full tonight. I appreciate your patience while we are harvesting corn here in Texas. My partner who has been hospitalized for over a month has come home but I am still on a combine until he fully recovers. Technology is amazing however, as I have been able to trade the market from the seat of a combine with no problems at all.

The markets finished higher but the beans may have fired their first shot across the bow of exhaustion. We will have more on that later this weekend. Rice limit down on the report. I thought the report was not just a little bearish but really bearish. We will have all the details later.

Thursday July 10th -

Quick General Comment - Markets are bracing for USDA report tomorrow morning. We will have a special audio update at 8:30. We have no other comments on anything tonight in front of the report.

In rice, the buying there was fund led late and it was on very low volume. This probably doesn't mean anything but we will give it a day or two to see what is happening.

Natural Gas is bouncing as we expected but we are not ready to buy big. Tomorrow is a key day in the energy markets.

This weekend, we will have a full update based on the report tomorrow

Wednesday July 9th -

Corn - Lower today as corn continues to brace for Friday's report and long's liquidate holdings. As I said on the Audio Update tonight, I see corn lower still near term but then starting to follow the Soybeans. Time is running out for any sustained rally to catch hold but the best chance lies with beans going higher. After the report's affects, look for corn to start trading closer to the beans.

Wheat – Following corn and still sideways.

Beans – The market is telling us that Friday's report will be bullish beans and with July weather still ahead and then the month of August, I don't see a lot of pushing beans down much especially if the report is bullish on Friday.

Rice – $17.40 is support for September. We were down 16 today and the market may test that level of support. History says this is a bad time to be trading rice unless there is a problem overseas. I don't see that right now so we still see the market as sideways and may take a short a buying in some of our shorts near support.

Cotton- A nice bounce but it doesn't mean anything yet. A close over 75.00 would confirm the market as sideways for now.

Natural Gas – Down 30 today as Nat Gas falls apart and heads for support around $11.50. I bought some UNG (ETF) today but very lightly. I will add to it as it heads for support. My concern is a hurricane in August and a market selling off in front of that could be a formula for a very sharp move higher. Again, it is a weather market but even so the longer term forecasts are bullish given the fundamentals.

Crude Oil - Higher and holding support. A test of $130.00 remains possible.

Gold - Support holding. I like the GLD fund here.

Dow - WOW...Down 236 points but not into new lows. 11,100 is support and if that is taken out, we should have no problem taking out 11,000 as well. 10,800 has been our target for months. Looks like it may happen.

Cattle – Higher even with corn down. I still see little risk here near term.

Tuesday July 8th -

Corn - We got our hard hit down I talked about last night today but at limit down, the selling dried up and we bounced 20 cents off the lows but still closed sharply lower on the day. We will slop around here as the market unwinds and sets into a range. The lows could be tested and I expect a rally at some point to find where the sellers are at and the buyers walk away. It is not over but the fat lady has certainly been heard warming up so be ready.

Wheat – No surprise here as the market rallied once corn started back up. Near term, it remains sideways and I see little risk in owning wheat. If you have a good basis and can move it to futures we would do that in a heart beat.

Beans – Beans couldn't take out the weather premium because it is the wrong time of the year for that. Beans will be looking for resistance near term but it is all in the weather forecasts for the first of August to set the real tone here.

Rice – We fell right into our window of support and roared back which makes me feel better about the sideways market. Look for less and less volatility here as the market settles into its pre-harvest lull.

Cotton- Off lows but still down. Nothing to do here yet.

Natural Gas – A huge day down confirming a top but I must admit...this may be the gift of the century. A possible break to $11.50 on the chart but I'll be long this one before we ever see that level. All it takes is one hurricane headed into the gulf. I'm buying UNG (this is the Natural Gas Exchange Traded Fund or ETF) right here if there is any kind of a buy signal.