Dryness in South America Attracts Attention
Dec 13, 2011
Good Morning! Paul Georgy with early morning comments for December 13, 2011 at 5:20 am. Grain markets are firmer as dryness in Argentina and Brazil is getting attention. In recent days there have been a few Ag groups from Brazil who reduced the size of crop due to dryness. Our weatherman agrees with less moisture for a few days but believes cooler temps will reduce crop damage. Grain futures oversold status is supportive as money moves to a cheaper product. Moody and Fitch rating agencies are disappointed in EU leaders action which is causing fund managers to reevaluate their confidence is equities. The CFTC weekly Commitment of Traders report showed large spec traders reducing size in corn, beans and wheat. Going into yearend it would appear unlikely they will be back as players unless there is a shift in confidence in EU or a sharp increase in demand for agricultural products. Cattle futures rallied on Monday when afternoon beef product came in higher. Late data put choice beef up 4.12 and select up .12. The lean hog futures closed well off the lows and showed signs of a possible technical turnaround. Forward the Allendale Wake-Up Call to a friend. You have my permission. Thank you and Happy Holiday’s.
Markets as of 5:20AM
Corn: 2 to 3 higher Beans: 2 to 3 higher Wheat: 3 to 4 higher
Live Cattle: 10 to 20 lower Lean Hogs: 20 to 40 lower
Dollar: .20 lower Crude: 65 higher Gold: 1.20 higher
Allendale Advanced Charts
March soybean futures checked for sell stops below the 11.00 area on the opening Monday, but was able to close higher on the day. Closing near the high of the day gives us an indication of potential bottom and also Monday’s low will now be critical support.
Nelson Notes from the desk of Rich Nelson
Trading funds, classified as Managed Money, are now net short 10,193 contracts of soybeans. This is the most bearish they have been on soybeans since October 10, 2006.
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.