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Market looks exciting with strong futures
Mar '08
After three locked down limit sessions, we had returned to the trading range where export business had been done in the mid 70's and this managed to uncover some nervous demand overnight. After reaching synthetic lows near 75.50, we swung higher and eventually traded all the way up to a synthetic close today at 84 cents.

Not the same kind of volatility that we experienced last Tuesday with a 20 cent range, but enough to be exciting. After falling to an 18% spec long position, relative strength index back to 50% and volatility into the mid 20's yesterday, the market was entering oversold territory and finally snapped.

Volume today was strong with 38,000 futures and 68,000 options as volatility bounced back on the spot month into the mid 50's. Today's 07/08 USDA S&D report was bearish as U.S. exports were lowered 1.2 million bales to 14.5 million due to a combination of lower import demand by China and Turkey and greater competition for market share from India.

Ending stocks were raised to 9.4 million bales, basically back to where we ended last season near 50% stocks to use. Take a look at a summary on page 2, but overall the S&D report was very bearish, but most of these fundamentals were already priced into the market.

Corn, wheat and soybeans were neutral to bearish as well, but there was a 1 million bushel cut in U.S. 07/08 wheat ending stocks which lowered stocks to use to 10% or the lowest level since the mid 40's and world ending stocks remain at 30 year lows. This forced wheat to trade limit up and it followed a green day in commodities and the stock market.

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