Grain Traders Even Positions ahead of USDA Report
Good Morning! Paul Georgy with early morning comments for Dec. 7, 2011, at 5:20 a.m. This morning we are reporting from Austin, Minn., where temps are 12 degrees. Grains are rallying off of short covering from oversold markets. There has been no change to fundamentals; however, we are getting closer to the USDA monthly supply and demand report, which will be released on Friday morning. Macro markets are keeping a watchful eye on the EU leaders meeting on Friday. The S&P ratings firm has warmed the Euro countries that serious progress must be made or it is likely they will lose the AAA ratings. The technical turnaround seen on the charts yesterday may be short-lived unless China comes in as a large buyer again or the Argentina weather becomes seriously dry. Beef values were slightly higher on Tuesday, while cattle futures were lower. The premium of cash to futures is limiting deliveries against the December contract. Pork cutout values were higher yesterday. Hog futures were led higher by nearby contracts as cheaper inputs fuels ideas of herd building tightening supplies. Sign up for the Allendale Conference in January and you will receive Drew Lerner’s forecast for 2012 firsthand.
Markets as of 5:20AM
Corn: 2 to 3 higher Beans: 5 to 6 higher Wheat: 3 to 4 lower
Live Cattle: 15 to 20 lower Lean Hogs: 20 to 30 lower
Dollar: .15 higher Crude: .11 lower Gold: 4.70 lower
Allendale Advanced Charts
Although the corn market rebounded into the close on Tuesday, it also confirmed a large Head & Shoulders Top formation on the chart early in the session. The objective sits down at 3.75, which might be a tad unrealistic at this point, but worth pointing out. See trade recommendation in Allendale Advance Charts.
Nelson Notes from the desk of Rich Nelson
Rains directly during harvest season in Eastern Australia could harm quality. Just like last year, this could mean an abundance of feed quality wheat versus higher grading milling. Asian grain traders suggest this additional feed quality product could further pressure corn prices in the feed grain market.
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 of 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.