Change Of Attitude Out Of Europe – Risk On
Jan 31, 2012
Good Morning! Paul Georgy with early morning comments for January 31, 2012 at 5:10 am. Grain futures are higher on a reversal of sentiment out of the Eurozone. The Brussels summit concluded with a new bailout fund called the European Stability Mechanism which will be put in place by July 1. The hopes of a Greek debt plan with private investors will be worked out this week has added to the risk-on attitude this morning. Traders will be watching the results of the Florida primary and US economic data to be released later today. Weather in South America is waning from the spotlight as rains are coming where it is needed and harvest weather has arrived in the north of Brazil. Tight supplies of old crop corn continues to support the market on any retracement in price. However the price relationship between December corn and November soybeans is developing as it own story. The current price relationship between gives about a $400 per acre return advantage to corn when using average yield. You can sharpen your pencil and reduce corn yield by 10 to 15 bushel per acre for second year corn and still return more than a good crop of beans. These are numbers the trade will be analyzing and adjusting before the March 31 Planting Intentions Report. Should you be selling December corn NOW? Cattle inventory report was friendly but near term fundamentals suggest we have some work to do. Product is struggling to move at the retail counter. Dressed weights are heavier week over week and packer margins are deep in the red for several weeks. Choice beef was down 1.25 and select was down .54 on Monday. Pork cutout values were up .65. Call your Allendale Representative Today and take action on your marketing plan. Call 800-262-7538. You can get more details by subscribing to the Allendale Research Center.
Markets as of 5:10AM
Corn +9 to +10 Live Cattle +50 to +70 US Dollar Index -36
Beans +9 to +10 Lean Hogs +50 to +80 Crude Oil +1.58
Wheat +11 to +13 S&P Index +8.00 Gold +8.80
Allendale Advanced Charts
March soybeans backed off after failing to close above the 100 day moving average. After falling 30 cents on Monday, it now appears we are headed to short-term support near 11.75.
Nelson Notes from the desk of Rich Nelson
Markets are disappointed that after intense negotiations with its creditors since Thursday, no agreement has been made. No agreement is expected in time for today’s EU finance minister meeting either. Again, we hear continued talk that an agreement will be made "soon" but the trade is now becoming concerned. A lower Euro, and higher US dollar, is bearish to commodities.
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