Early Month Money Flow Drives Markets
Apr 03, 2012
Good Morning! Paul Georgy with early morning comments for April 3, 2012 at 5:10 am. Grain futures are mixed with corn higher and soybeans and wheat lower. The USDA gave us the first crop progress report of the season yesterday afternoon. Corn plantings were 3% complete compared to 2% last year and 2% average. The highlight was IL with 5% planted and IN with 1% compared to 0% last year. The excellent planting weather has producers planting corn. Price relationship between corn and beans has moved from 2.0:1 in January to 2.54:1 yesterday. Current spread value already has producers considering switching from corn to soybeans. In 2009, the price relationship was similar and from March to June reports, soybean acres increased by 1.5 million acres. The beginning of the quarter and month has money flow moving back into grains. Funds continue to extend their long positions by adding another 9,000 soybeans and 15,000 corn on Monday. Weather forecasts will have an impact on grain prices for next several weeks as frost is a concern until we get into May then too dry or too wet will be a factor. The macro markets will be watching China’s economic data and the EU dealing with financial problems. The cash cattle trade was at a standstill Monday but choice boxed beef was up .73 and select was down .05. Hog futures rallied after the Hogs and Pigs Report and now have potential for a seasonal bottoming action. Pork cutout values were down .02. Allendale Research Center "Planting Special" is giving you the opportunity to subscribe for only $99.00.
Markets as of 5:10 AM
May Corn +2
May Beans -4 3/4
May Wheat -4 3/4
Apr Cattle +.20
Apr Hogs -.15
Jun S&P -2.75
Jun $ Ind -.01
May Crude -.80
June Gold -2.30
Allendale Advanced Charts
The hog market broke above its short term downtrend line and closed above it today. If we can close above today’s highs we may be setting a bottom. Look for resistance at the 20 day MA which is 85.75.
Nelson Notes from the desk of Rich Nelson
Friday’s report indicated the mid-year count of corn stocks came in smaller than expected. The 6.009 billion bushels, counted as of March 1, may cause analysts to lower their view of end of year stock levels. Industry discussion is that USDA could eventually lower their current 801 million bushel estimate, for August 31, down to 600 – 700 million by summer.
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.
