Rumors Rule Markets
Mar 13, 2012
Good Morning! Paul Georgy with early morning comments for March 13, 2012 at 5:20 am. Grain futures are higher this morning. Rumor of China buying old crop corn was the catalyst which turned prices higher on Monday. We are all waiting for 8:00 am when the USDA releases any sales of 100,000 tonnes or more. Will it be China, or South Korea and Mexico who are looking to buy corn? Current tight stocks of US corn will continue to provide extreme sensitivity to rumors and weather until we are sure the 2012 corn crop is made. Traders are already focusing on the March 30 stocks report which should help provide a clearer explanation of the USDA’s balance sheet for corn. March 30 Prospective Plantings numbers will be key for price direction of new crop corn and soybeans. Allendale will be releasing the results of our 23rd Annual Planting survey on Friday morning at 7:30. The Greek Credit Default Swap issue has cooled off until next Monday when the pricing will be settled by auction, but don’t expect the EU to stay out of the spotlight for long. Portugal seems to be the next country to have financial issues. Weather in South America is not a factor right now but focus is switching to the US Midwest. Corn planting will be getting underway this week in Southern Illinois and Indiana. Cattle futures on Monday had a large price swing late in the session prompted by short covering in an oversold market. Product values were under pressure again. Choice was down .73 and select down 1.11. Hog futures did not show strength on the close as pork cutout values ended the day up .58. Full details can be found in the Allendale Research Center, Subscribe TODAY!
Markets as of 5:20 AM
May Corn +3 Apr Cattle -.02 Jun $ Index +.11
May Beans +12 Apr Hogs +.05 April Crude +.45
May Wheat +4 Jun S&P +7.75 June Gold -3.50
Allendale Advanced Charts
Corn futures have rallied nearly 30 cents in 2 sessions and are still in a trading range. Resistance crosses at 665 and then at the January highs of 6.72 ½. Support remains at last week’s lows.
Nelson Notes from the desk of Rich Nelson
In recent weeks there has been disagreement over the size of China’s fall corn harvest. The official government estimate is 191.75 million tonnes (Ministry of Agriculture). The think-tank, China National Grains and Oils Information Centre, sees it at 185 mt. Private Chinese brokerage firm, JC Intelligence, sees it at 168 mt.
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