Commodities Quiet as EU Leaders Search to Save Deal
Nov 02, 2011
Paul Georgy with early morning comments for November 2, 2011 at 5:05 am. Commodity markets are quiet this morning as we see a little short-covering. The most asked question yesterday afternoon was what happened in the corn futures. The answer comes from our floor contact as he feels it was liquidation by MF Global floor brokers holding the long Dec 12, short Dec 11 corn spread. They were positioned to take advantage of the Deutsche Bank Roll which starts today. Yesterday was the first chance the local brokers who cleared MF Global were able to liquidate their positions. The Dec-Dec spreads moved as much as 10 cents on the close yesterday. The macro markets, MF Global liquidation and Fed Meeting comments will continue to affect the direction of the grain markets. Weather remains good in South America and it look like the Southern Plains will receive some rain late this week. More estimates on what the USDA will say next week on the Monthly S+D report should be seen around 10:30 this morning. The cattle market surged higher as cash traded several dollars higher in Nebraska as packers wanted to buy inventory. Beef cutout values were lower which increases the loss per head by packers. Pork cutout values are down .63. The dollar is down .26, crude is up .29, gold is up 20.10 and stock indexes are slightly lower.
Allendale Advanced Charts
Corn saw a very swift, late session rally yesterday that triggered buy stops once the previous day’s high was hit. The close was above the 38% retracement level and just shy of the 40 day moving average. Overall the markets remains in a sideways range and a close above 6.60 could push prices to the 50 % retracement of 6.75…Monica Moehring from Noblesville, IN office.
Nelson Notes from desk of Rich Nelson
ADM reported quarterly profit numbers. Their oilseed processing unit reported a 28% decline in profits at $221 million. Last year, in the same quarter, profits were $308 million. Given projected levels of soybean crush margins in that time, we are surprised their profit was even that high.