Money Flow Drives Commodity Markets
Nov 18, 2011
Good Morning! Paul Georgy with early morning comments for November 18, 2011 at 5:15 am. Grains quiet in narrow trading ranges overnight as dollar sees some profit-taking. Grain markets performed like we thought could happen when recent lows were violated on Thursday. Large sell orders were activated at several support points below 6.30 in December corn. Demand seems to have been the match that ignited the selling as USDA Weekly Sales numbers were less than acceptable for this time of year. Thursday price action seemed as if it was fueled by liquidation which started in Europe. France and Spain bond auctions did not go well which caused more selling due to lack of confidence. Weather remains positive for crop performance in South America. The question traders will have to answer today "Was yesterday the beginning or the end of another round of liquidation in commodities"? The weekly close is going to be very important to technical traders. Cash cattle traded 2.00 to 3.00 lower and cutout values had little change on Thursday. Hog futures are driven by expectation of better exports. Contact your Allendale Representative to discuss market opportunities.
Markets as of 5:15AM
Corn—0 to 1 lower Beans—4 to 6 higher
Wheat—2 to 3 higher
Live Cattle—5 to 15 lower Lean Hogs—5 to 20 lower
Dollar— .27 lower Crude— .13 higher
Gold— 8.70 higher
Allendale Advanced Charts
Corn dropped quickly on Thursday after breaking two key levels at 6.30 and 6.22. the close was near the 62% retracement at 6.08. We have not seen prices this low since October 11. There could be a short covering bounce on Friday however a lower weekly close could provide more liquidation.
Nelson Notes from the desk of Rich Nelson
This week’s corn sale of 208,900 tonnes (8.2 million bushels) represents the lowest in over 20 years for the second week of November. This is 75% less than the five year average.
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.