Narrow Trading Range In Grains
Feb 23, 2012
Good Morning! Paul Georgy with early morning comments for February 23, 2012 at 5:10 am.
Grain futures are mixed as buying beans and selling corn dominates market action. The fundamental news is old stories with a new twist. South American weather seems to be the most supportive to beans as some analyst lower production almost daily. With recent rains it seems likely that beans and late planted corn should be improving. The Outlook Board Forum will begin today with grains and livestock discussions on Friday. The USDA will release the presentation at 8:00 am (CST) tomorrow morning. Spreading will likely be a major factor into the Friday morning numbers. We have option expiration on Friday and if you have been following March corn, it has traded at 6.40 fifteen out of the last nineteen sessions. The Greek financial situation is not settling very easy with traders and investors. Many are not convinced Greece can abide by the terms agreed upon. Portugal will be next in line for money from the EU. Wednesday’s monthly Cold Storage report held bad news for the meat industry. It confirmed that consumers backed away from meats in January. Stocks of pork in warehouses at the end of January were 100 million lbs. higher than the end of December. Though there is normally a rise during January, the five year average increase is only 59 million lbs. If consumers had a problem eating pork then perhaps they moved to chicken? Beef in warehouses grew by 25 million lbs. in the month of January. It had been six years since we saw an increase of that amount. In fact, the average January movement is for a 12 million lb. decline. Choice beef was 2.73 higher and select was up 1.48 on Wednesday. Pork cutout values were down 1.14. Lean hog futures broke the 90.75 level yesterday but were unable to close above it. We will be driving to Carrington ND later today, hope to see many of you at the meeting. Sign up today and reserve your free seat for our Allendale 2012 Road Series
meeting in Carrington, ND
and Riverside IA
Markets as of 5:10 AM
Corn -1 to -3 Live Cattle -10 to -30 US Dollar Index -.26
Beans +3 to +4 Lean Hogs -20 to -40 Crude Oil +.08
Wheat -2 to -3 S&P Index +1.00 Gold +6.10
Allendale Advanced Charts
Crude oil continues to climb at a steep trend. The break out gap left on Tuesday will be very important to the direction of the market. A close below that level could open the door for a quick sell-off.
Nelson Notes from the desk of Rich Nelson
Last week Ukraine newspapers indicated the government had encouraged grain companies to voluntarily limit grain exports. Overnight the Agriculture Minister indicated no such government action was taken. The official indicated exporters have told the government they can only export 300,000 to 500,000 tonnes per month due to tight supplies. He indicated total production would range from 42 to 50 million tonnes in 2012. That is down from 56.7 last year. Wheat harvest was seen at 15 to 16 mt compared with last year’s 22.3.
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.