EU Headlines Drive Market
Nov 07, 2011
Good Morning! Paul Georgy with early morning comments for November 7, 2011 at 5:15 am. This morning the macro markets are again grabbing the headlines to influence the trades’ decision making. The Greek Prime Minister has agreed to step down and setup an interim government until January elections can be held. It also is anticipated that the new government will have enough votes to accept the EU plan. There was rumor over the weekend that the EU will stop buying Italian bonds until the country makes some policy changes. The CME has lowered margin requirements on initial margins to maintenance margin levels. This was done to help the firms who accepted MF Global accounts which received only a portion of the money from customers’ segregated accounts. Grain fundamentals remain bearish as demand seems to have dried up and world crops are getting bigger. Moisture is falling in the southern plains and South America is getting the spring rains which get a crop off to a good start. We expect to see choppy markets ahead of the USDA November Supply and Demand Report Wednesday morning. The trade average is 147.7 bpa for corn yield and 41.4 bpa for a bean yield. The USDA estimates last month were 148.1 corn and 41.5 soybeans. The livestock futures are expected to open steady lower as the stock markets could influence trader attitude early in the session.
Markets as of 5:15AM
Corn—0 to 1 lower Beans—1 to 3 lower
Wheat— 1 to 2 higher
Live Cattle—Called steady lower Lean Hogs— Called steady lower
Dollar— .03 higher Crude—.20 higher
Gold— 12.60 higher
Allendale Advanced Charts
Beans backed off from the down trend resistance line on Friday. Initial support crosses at the 62% retracement level of 12.09 ¾. Then support would be last week’s low of 11.90. The short and long term trends are down in Jan beans.
Nelson Notes from desk of Rich Nelson
The Bureau of Labor Statistics reported October job growth totaled 80,000. That was less than the 95,000 increase expected. However, the government made positive revisions to previous data. September job growth was revised from 103,000 up to 158,000. August job growth was revised from 57,000 to 104,000. With positive revisions to previous data, this report will be considered neutral.
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