Funds Hold Record Long Soybean Contracts
Mar 28, 2012
Good Morning! Paul Georgy with early morning comments for March 28, 2012 at 5:00 am. Grain futures are higher this morning. Traders are adjusting positions ahead of Friday’s USDA report. This report has significant moves after the data release; Bloomberg News released a study suggesting corn had limit moves after the report 6 out of the last 7 times. Funds have record long positions in soybeans and seem to have a "bullet proof" mentality about being long. Brazil crop watchers continue to downgrade the soybean production for that region. Wheat is beginning to come out of dormancy in Spain and France where moisture is short and the forecast for rain is limited. Although we must remember according to the latest USDA report there are record world wheat stocks. The next two sessions will be impacted by money flow. Funds were estimated to have sold 9000 corn contracts, 6,000 soybeans and 4,000 wheat on Tuesday. Markets will move with their bias until Friday morning. More discussion can be found in the Allendale Research Center. Livestock futures gave us a bounce on Tuesday but there was no help when the beef values were reporedt. Choice was down 1.31 and select was down 1.18. Technically the rally on Tuesday could have been short covering due to oversold markets. Pork cutout values were up .58. Allendale has a special pricing for the Allendale Research center go to www.allendale-inc.com
for more details. There are only a few days to take advantage of the Planter’s Special for $99.00. Listen to the Morning Coffee on Friday Morning to get the update on the report.
Markets as of 5:00 AM
May Corn +1 1/4 May Beans +7 3/4 May Wheat +3 3/4
Apr Cattle -.15 Apr Hogs -.05 May Crude -1.02
Jun $ Index -.01 Jun S&P +1.00 June Gold -10.60
Allendale Advanced Charts
June cattle futures rallied on Tuesday and now appear to have momentum to test the 20 day moving average and the downtrend resistance line at 123.75. Key support cross at Friday’s low of 120.17.
Nelson Notes from the desk of Rich Nelson
The trade is now discussing whether current high soybean prices will take acreage away from corn. Revenue comparison is a more accurate measurement than the well-known soybean/corn ratio. Since the first of the year, corn’s premium over soybeans has declined by $106 per acre.
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 or 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.