Some may be thinking that selling occurs at year end and this is likely. The volume may be due to this and or because of the debt issues overseas. Portugal and Italy might be in the spot-light a little more starting 2011.There might be a bounce in the market from Chicago PMI and Consumer Confidence today. Expectations show an increase in both but nothing is set in stone.

Commitment of Traders as of Nov 23rd:

Wheat S 22,117 marginally shorter than previous week.

Corn L 336,111 43K weak longs left the market.

Beans L 162,911 gained 2,500 longs.

Oil L 46, 370 lost 7000 longs.

Meal L 40,373 gained 1,000 longs.

Going back to the obvious differential between wheat and corn you can see why I like the relationship value of wheat at current levels.

—Matt Pierce

Macros are mixed this morning with crude holding and adding to early gains against a collapse in the Euro against the USD. This will hamper any exaggerated rally… I think that’s another reason to look at selling volatility.

Gold is trading 2.70 Higher sitting at 1,365.10. This is a solid upside move fighting off early negativity.

Crude is trading .80 Higher sitting at 84.56 as of 8:20 CST.

The Euro is .0167 Lower trading at 1.3116 versus the USD. This is a direct response to the Irish bailout and talk of impending problems with Portugal and extended problems in Greece.

The Yen is .34 Higher against the USD trading at 84.24.

Matt Pierce’s appearance on Bloomberg has been delayed due to what Matt’s is calling a “brutal” close in the grains that requires his attention. We will post and tweet the updated broadcast time when it’s known.

China’s traditional play in beans has been to sell close to the money puts to help finance their insatiable cash demand for beans. Today we saw MF Global sell 2,100 sh 1140p, buying 700 sh 14-18 call spreads putting 60-cents in the bank. If this is a new method by China, the bean market all of a sudden looks extremely bullish. This play states that China feels beans should advance well over $14.00 by the end of Feb. I believe this is a very bullish situation that needs to be noted.

Core producer prices fell for the month of October which was one of the biggest drops in over 4 years. PPI was expected to rise 0.8% but only rose 0.4% last month. This might not be good news for the dollar and could be a sign that inflation is presenting itself. Our countries debt is growing, individual states are doing their best to raise money by issuing more debt, and the cost of goods is rising. Does the stock market really deserve to be on the upward move? Monetary policies and spending have to be strategically placed. By throwing money at our countries issues we might be causing new bubbles. Only time can tell!

Argentina approves 5 mmt of corn exports

Wire services quoting senior govt officials that 5 mmt of corn exports have been approved. Argentine Ag Minister says they will be able to export 18.5 mmt in 2010/11

JAN. BEAN: 12.66 (traded 12.685 on modified)

DEC. SOYOIL: 52.30 - 52.40

DEC. CORN: 533 (traded 534 on modified)

Yesterday the market saw a messy session where grains and the soy complex diverged. The main catalyst was the Informa new crop acreage numbers and an immediate play in SX11 versus CZ11. Paper bought 700 SX11 selling the Dec. I think this is an obvious acreage play five months in advance of the real numbers from the USDA. The only real plays I saw were buying the SH 1340-1540 call spread 1,500 times paying 44. This is an immediate coverage play for someone obviously bullish both volatility and delta. In corn the market saw vol selling once again with Dec paper running for cover as both Theta and Vol are killing them. Not much seen in March and deferreds. Wheat was a sluggish non-factor all session. The surprise is that it lost to corn in the end in spite of growing talk of total losses in W. KS. The overnight session opened stronger led again by beans but this was halted very quickly around 8PM. Rumors from China concerning raising rates and raising import quality standards brought the market to heel. This added to yesterday’s downside pressure by profit taking moves. The pressure today is felt most in bean oil with both palm oil and Chinese bean oil losing 4% overnight. The day session looks to open wildly lower with export sales only offering wheat any reason to fade the negative momentum. Heading into the weekend I think the downside is the path of least resistance with weak length looking to run for cover.

Matt Pierce is traveling back from Cartagena, Colombia today where he attended the world’s largest conference on wheat. He will return to a regular schedule tomorrow.