Holiday Short Covering Rally
Dec 21, 2012
Good Morning! Paul Georgy with early morning comments for December 21, 2012 at 5:10 am. Grain futures are higher as traders even positions ahead of the holidays. The weak technical picture and poor demand for US grains had funds reducing longs. Yesterday they sold an estimated 10,000 soybean contracts, 6,000 corn contracts, and 4,000 wheat contracts. As we close out this week, traders will be preparing for the holiday-shortened week ahead. Demand has been a huge driver of the grain markets. This week China cancelled 840,000 tonnes of soybeans and another 120,000 were cancelled by unknown buyers. Brazilian growing areas received good coverage of precipitation with normal temps in the forecast. Argentina should see some drier weather over the next two weeks. Argentine plantings are still behind last year by 4% in soybeans and 9% in corn with 77% and 74% completed, respectively. Disappointing weekly corn sales and a negative technical picture is continuing to weigh on the corn futures. It will take a report of some confirmed sales to convince buyers to come back to the table. The March contract tested the gap left from early July trade. A close below the 6.83 level in March corn would be a severe blow to the bulls. The water level is expected to rise sharply by Christmas morning due to the recent rain/snow and the release of water from Carlyle Lake. Basis along the river system was off 5 cents yesterday. The fiscal cliff negotiation will be in the spotlight going into December 31
st. Cash cattle traded at 126 in KS which was 1.50 to 2.00 higher than last week. Boxed beef was mixed with choice down 1.49 and select up .25. December Cattle on Feed report will be released today at 2:00 pm. Snow fall across IA will hamper movement of hogs but packers say they have enough inventory to get through the week. Pork cutout was down .64 on Thursday. Grain markets close at noon on Monday and livestock will close at 12:15. Allendale Office will close at 12:30 on Monday, Christmas Eve. The Ag markets will reopen on Wednesday morning at 9:05 for livestock and 9:30 for grains. We will resume producing the "Wake-up Call" on January 3, 2013. You will be able to get Allendale market commentary by listening to the
"Morning Coffee" or by subscribing to the
Allendale Advisory Report. We thank you for following us in 2012 and all of us at Allendale want to wish our readers a Happy Holiday Season and a Prosperous New Year!
Markets as of 5:10 AM
- Mar Corn +4 1/2
- Jan Beans +13 1/2
- Mar Wheat +3 1/2
- Feb Cattle -.05
- Feb Hogs +.10
- Mar Dlr -.10
- Mar S&P -18.75
- Jan Crude +1.58
- Feb Gold +.80
