Buyers Supporting Corn After Sharp Break
Sep 11, 2012
Good Morning! Paul Georgy with early morning comments for September 11, 2012 at 4:45 am. Grain futures are mixed with corn and wheat higher, soybeans slightly lower. Yesterday’s sell-off was a surprise to many traders, especially ahead of this week’s major reports and macro-economic data. The USDA Supply and Demand is being watched very closely as traders and analysts have been estimating what the yield may be for weeks. More importantly is the total production and ending stocks which will give us a "believe it or not" number. Has demand slowed enough to make the USDA numbers work? Harvest is moving along in corn with 15% complete compared to 5% average. Soybean harvest was 4% complete versus last year of 1%. Soybean conditions improved by 2% last week, to 32% in the G/E category. The Fed meeting on Sept 12 and 13 with minutes released on Thursday has traders expecting an announcement of QE3. The other camp is saying Bernanke will save his bullets for a better time. The German Constitutional Court is expected to rule on the constitutionality of the ESM on Wednesday. This is the main bailout mechanism of the European Central Bank. It is not expected to be ruled unconstitutional but they may add directives. The sell-off in December corn on Monday closed below support at 7.86 ½ which now becomes resistance and critical to close above that level in the next few days to maintain trend. See technical comments from Frank La Placa below. The hog futures were influenced by the sell-off in corn which prompted fund buying and short covering of an oversold market. Can the buying continue? Pork cutout values were stable being down only .02. Cash cattle traded late on Friday at 124 to 125 in the south. Boxed beef on Monday was mixed, choice was up .59 and select was down 1.02. We expect all Ag markets to be choppy going into a Wednesday filled with data and headlines.
Markets as of 4:45 AM
Dec Corn +3 3/4
Nov Beans -1 3/4
Dec Wheat +1 3/4
Oct Cattle +.27
Oct Hogs +.02
Sep Dlr -.15
Sep S+P +2.75
Oct Crude +.00
Dec Gold +1.40
Allendale Advanced Charts
Yesterday Dec Corn took out the 8/13 $7.86 low which negates the uptrend and confirms a peak and reversal threat that should see follow through selling as we begin what could be a significant correction from these levels. Unless we see a close above the 8/30 $8.17 swing high continued downside pressure should not surprise. I also feel that due to today’s confirmation of the downtrend, that producers should look to be 60% priced in Dec Corn…Frank LaPlaca
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
With Friday’s monthly job’s report only indicating 96,000 new non-farm payroll jobs, the financial trade believes QE3 is right around the corner. A Reuters newswire poll of 59 economists, found 60% of them believe the Fed will take action at the upcoming September meeting.
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