Grain Markets Waiting For Demand News
Dec 01, 2011
Good Morning! Paul Georgy with early morning comments for December 1, 2011 at 5:20 am.
Grain futures are mixed in overnight trade. Headline traders should have plenty to trade on in the next few weeks. The macro markets moved the grains on Wednesday and we expect for it to continue. The Central Banks in 5 major nations’ announcement of a joint effort to lower the cost of dollar liquidity between banks surprised the market place. China even got involved by lowering their reserve requirement for its banks by .5%. The Eurozone countries have a lot of work to do in the next 10 days to meet guidelines setup to get funding. The US traders will be waiting for economic data at 7:30 this morning for validation of buying enthusiasm. Non-farm payroll tomorrow morning will be focus of economic releases. Grain traders are waiting for weekly export sales data at 7:30 this morning. Demand is the second half of the equation for higher prices. The investors have gained confidence by central bank intervention yesterday. Weather in South America is near ideal with rain forecast for later this week. Australia is wet in a small portion of wheat growing area which should not have a big impact on overall production. No cash cattle sales reported for this week but we expect they could eventually trade at steady with last week. Cutout values continue to erode even with the slowdown in slaughter. Choice beef was down .52 and select was down .82. Cash pork prices were stronger this week however carcass cutout values were down 2.10 on Wednesday. Don’t forget to sign-up for the year end special Allendale Research Center
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Markets as of 5:20AM
Corn: 1 to 2 lower Beans: 3 to 5 higher Wheat: 2 to 4 higher
Live Cattle: 20 to 30 higher Lean Hogs: 20 to 30 higher
Dollar: .08 lower Crude: .25 lower Gold: 1.80 lower
Allendale Advanced Charts
Corn finally managed to close above the key 6.00 level today. The market continues to hold above Friday’s low of 5.82. It is hard to be convince a bottom is in when settlement price is 8 cents of the highs which were made on the opening. See trade recommendation in Allendale Advance Charts page 9.
Nelson Notes from the desk of Rich Nelson
The People’s Bank of China, China’s central bank, surprised the financial world overnight by cutting reserve requirements for banks from 21.5% to 21.0%. This move increases the amount of money their banks can lend. It represents a clear shift in policy from monetary tightening, which slows economic growth, to one of easing. For almost three years, the country had been tightening. This increased growth could reignite interest in buying commodities based on "good demand" expectations.
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