Choppy Overnight, China Big Buyers of US Pork in Sept...
Nov 16, 2011
· Grains lower overnight after a bounce yesterday; Jan soybean able to trade above $12 yesterday, but were unable to penetrate a downtrend line near $12.10
· Corn prices testing the lower end of recent trading range yesterday; Dec options expire next Friday, no major reports between now and then
· Japan bought 800,000mt of Ukraine corn due to high priced US corn
· China bought 6 cargoes of US soybeans yesterday according to reports; China plans to buy 2mmt of beans for state reserves
· Chinese trades do not expect China to import corn until early spring
· Argentina on track to produce a record corn crop near 24-25mmt; Current USDA estimate higher at 29mmt
· Sept US pork exports up 37% last year; China expanded pork imports nearly 310% year-over-year; Sept US beef exports up 27% from last year, but slightly less than the last few months
· Ukraine will harvest 55mmt of grain, up 15.8mmt from last year
· Outside markets mixed, should have no major impact this morning
Grains continue to trade a range as harvest wraps up. China purchases are good news for soybean bulls; however the market remains in a short-term downtrend. A close over the $12.10-12.15 area in Jan beans would negate the trend and likely spark short covering. Corn looks destined to settle at $6.50 at option expiration next week. Wheat remains under pressure, however we believe it won’t take much to cause a major short –covering rally. Managed money is short about 26,000 contract of CBOT wheat.
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The information contained herein is the opinion of the writer or was obtained from sources cited within the update. It should be noted that the impact on market prices due to seasonal or market cycles and current news events may be reflected in market prices.