Tight Supplies Battle Outside Influences
Mar 05, 2012
Good Morning! Paul Georgy with early morning comments for March 5, 2012 at 5:05 am. Commodity futures are mixed this morning. Grain markets are battling between tight stocks and outside influences. The tight stocks of corn in the US and the inability of South America to export corn and soybeans on a timely basis have been positive to prices. The tug-o-war for planted acres of corn and soybeans is providing underlying support. Outside markets such as gold, crude oil and the dollar are not bullish at this time. Traders will be watching for headlines out of EU and China this week regarding their financial policies. Allendale will be continuing its survey of producers to gather planting intention data. We will release our findings on March 16, 2012. You help is greatly appreciated. The cash cattle marketed traded 1.00 higher than last week on Friday at 129 to 130. Beef prices were under pressure with choice down .38 and select down 1.35. Pork cutout values were up .27. The spread between cattle and hogs has been the major influence in futures. We are calling cattle and hog futures to open steady to better. Look forward to seeing many of you tomorrow at the meeting in Riverside, IA at 9:30 AM.
Markets as of 5:05 AM
Corn +1 to+3 Live Cattle steady better US Dollar Index +.03
Beans -3 to -4 Lean Hogs steady better Crude Oil -75
Wheat -2 to -3 S&P Index -6.25 Gold -11.90
Allendale Advanced Charts
The soybean market has been in an uptrend since early December. The May contract needs to hold the 13.00 area and then 12.60 level to maintain this long-term trend.
Nelson Notes from the desk of Rich Nelson
Liu Yonghao, the head of New Hope Group, told reporters that China should open its feed grain import and export policy. He noted tight government controls over corn imports has led to agriculture market inefficiency. Allendale could not agree more. Corn in the southernmost import port is priced at $8.48 per bushel in China. Corn in their hog growing areas can be found at $10.12 per bushel.
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.