Super Committee Is Expected To Announce No Results
Good Morning! Paul Georgy with early morning comments for November 21, 2011 at 5:15 am. Grains are testing lows again this morning. As we look ahead to a holiday-shortened week the macro news will continue to dominate trader’s bias. It appears the US Congressional super committee will not find a solution to budget cuts. As of this morning they are far apart on all proposals. On the Eurozone front, Spain has elected a new leader over the weekend which adds more uncertainty. The weather in South America is good for crop development. Argentina received rain over the weekend and Brazil should receive rain early this week. Demand is probably the biggest concern to traders as they will be watching for any sales announcement from USDA at 8:00 am CST. The CFTC report shows managed money reducing long exposure in commodities. Technical traders will be watching January soybean support at 11.60 area and the seasonal traders will be talking about the historical price rally patterns the day before and the day after Thanksgiving. Choice and select beef price spread narrowed on Friday as choice was down .27 and select values were up 1.27. Pork cutout values were 1.75 higher on Friday. We expect very choppy markets at times with spells of narrow trading ranges this holiday shortened week.
Markets as of 5:15AM
Corn—7 to 9 lower Beans—9 to 11 lower
Wheat—6 to 8 lower
Live Cattle—called steady to lower Lean Hogs—called steady to lower
Dollar— .38 higher Crude— 1.43 lower
Gold— 19.00 lower
Allendale Advanced Charts
On Friday January soybeans traded below key support but closed higher on the day. On a holiday-shortened trading week, support at 11.63 1/2, it will be critical to maintain a close above that level.
Nelson Notes from the desk of Rich Nelson
Our biggest interest right now is basis. Not only is this year’s basis extremely strong, but yesterday’s very sharp futures decline made it even better. Normally, basis weakens in December and early January as producers get active on January 1 cash sales. Contact your Allendale representative on discussing selling cash corn and re-owning it with very little cost. Some say getting a fantastic basis, and having potential to capture any upside in prices with no more downside risk, is ideal grain marketing.
There is a significant risk of loss when trading futures and options contracts. This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named, and each investor should consider the appropriateness of trading on this information, based on their objectives. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to accuracy. Past performance is not indicative of future results.