Spreading Becomes Major Feature As USDA Report Nears
Mar 22, 2012
Good Morning! Paul Georgy with early morning comments for March 22, 2012 at 5:10 am. Grain futures reverse early session gains as China releases manufacturing data. Signs of China’s economy slowing down continue to weigh on grain markets with corn getting the brunt of it. Reports of China buying feed wheat from Australia instead of US corn have those who ran the market up last week covering some of their positions. Corn also is getting pressure from the warm weather and forecast for some rain late this week for Midwest. Many producers are planting in the southern part of corn growing areas and many are telling us they will be planting next week. The early planting of corn has traders finally believing there could be more acres of corn planted and less beans. Current price relationships still favor corn. EU financial woes have been quiet this week although there is rumbling of potential problems in Portugal and concern Greece will not be able meet their economic goals. Spreaders have been the market movers in grains after the initial reaction from overnight news. Expect more of the same as we approach the March 30 USDA Report. Cash cattle traded at $127 today in the Central and Southern Plains. Nebraska sold a few cattle at $128. This $127 action was $1 higher than last week and a dramatic turnaround from early-week bearish expectations. The stronger than expected cash trade did not provide a lot of support to April futures. The product market is not providing much encouragement for futures traders as packer production slows down. Choice was down 2.12 and select down .66 on Wednesday. Pork cutout value was down .72. The high gas prices are believed to be affecting consumer demand. We are running a Spring Planting Special for the Allendale Research Center; 6 months for only $99.00 click here to sign up
Markets as of 5:10 AM
May Corn -3 1/2 Apr Cattle +.02 Jun $ Index +.16
May Beans -8 1/2 Apr Hogs +.10 April Crude -1.27
May Wheat -3 3/4 Jun S&P -8.25 June Gold -13.10
Allendale Advanced Charts
The corn market backed off a bit further on Wednesday, but still remains above the current uptrend and key support area near 6.40.
Nelson Notes from the desk of Rich Nelson
Ethanol producers in the past year have started focusing on separating out corn oil from the corn by-product of ethanol production. While this separate activity gives them a separate revenue stream it has also lowered the amount of fat and energy in their DDG content. Some livestock producers suggest this may make them less satisfied with the product and they may switch back to soymeal and corn.
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