Spreaders Dominate Price Movement in Light Volume Trading
Oct 24, 2012
Good Morning! Paul Georgy with early morning comments for October 24, 2012 at 5:15 am. Grains are higher as traders have a risk-on attitude this morning. China’s PMI data indicates signs of recovery and EU data will be released today. Tomorrow we have export sales and Friday we have option expiration. Grain markets are moving within a range battling tight supplies and demand interest. When macroeconomic influences are played out during the session then spreaders take over. The current tight supplies of all grains are supporting bull spreads. Demand is driving much of the reason for soybeans gaining on corn. South American corn exports are picking up the slack in US supplies. Brazil produced a record corn crop in 2011/2012 and expects to export a record 17 million tonnes. USDA expects Argentina exports to reach 16 million tonnes of corn from its 2012/2013 crop, while Brazil's exports could reach 19 million tonnes. The purchase by Mexico of 270,000 tonnes optional origin corn was switched to definitely not US corn by announcement from USDA yesterday. A concern of Allendale is the amount of time and at what price will it take to get corn demand back once supplies are replenished. Using the planted acreage estimates for next year and the possibility of a trend yield, bins could be full again in 2013. With increasing input costs, producers should be taking a serious look at protecting some of 2013’s insured bushels. Cattle are being supported by positive news in product prices. Boxed beef was firmer on Tuesday. Choice up .17 and Select up 1.18. Cash cattle are expected to trade at steady to higher this week. Lean hog futures were under pressure as long-term uptrend support is being tested. Product values were down 1.23 and supplies are burdensome. Seasonally a correction in price is possible. Our live monthly Ag Leaders Webinar
is October 30th
at 8:00 PM CDT. This month will feature a look at the soy complex with Rich Nelson, Frank La Placa, and our special guest, Al Ambrose (who will also be a speaker at Allendale Conference in January). We hope you can join us for the webinar. Registration
is free and open to everyone.
Markets as of 5:15 AM
Dec Corn +2 1/2
Nov Beans +9 1/4
Dec Wheat +3 3/4
Dec Cattle +.27
Dec Hogs +.10
Dec Dlr +.09
Dec S+P +3.50
Dec Crude +.14
Dec Gold +.03
Allendale Advanced Charts
Yesterday, Nov Soybeans had an inside range day. This implies that the Nov Soybeans may have run out of momentum to the upside since we were not able to take out Monday’s highs. I am looking for a close either above or below Monday’s range to assume the next leg of this market…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Winter wheat planting gained from 71% to now 81%. Planting is right near the 80% five year average. The real issue here is emergence as we are now 7% behind the five year average pace of 56%. South Dakota for example is only 13% emerged. Typically that state is 80% by now.
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