World grain prices retreat on currency intervention
Good Morning! Paul Georgy with early morning comments for October 31, 2011 at 5:20 am. Grain markets under pressure as outside markets influence dollar strength. The excitement is fading over the Euro bailout plan and the trade now realizes the plan has to be put into action. The European leaders are calling for support in bailout plan from the G-20 meeting this week. Weather in South America is being watched closely as current situation provides moisture and drying for good planting progress. Traders are already focusing on November Supply and demand report which is less than 2 weeks away. There was a sale of 120,000 tonnes Ukrainian wheat to Egypt reported in the news over the weekend. Deliveries are heavier than expect against the November soybean contract. There also are ideas circulating that funds may come back in the market at the being of November. CFTC Commitment of Traders showed managed money increasing the long position last week. The cattle futures will have to deal with the negative packer margins and weak stock market when they open this morning. Meat prices will have to move higher if cash can hold the $120 area. Retail demand will be competing against turkey in a few weeks. The dollar is up .91, crude is down .70, gold is down 28.40 and stock indexes are lower.
Markets as of 5:20AM
Corn is trading 8 to 10 lower
Beans are trading 10 to 12 lower
Wheat is trading 6 to 8 lower
Live Cattle are called steady to lower
Lean Hogs are called steady to lower
Allendale Advanced Charts
Beans continue to build a sideways trading range above the 20 day moving average. Key chart support for Jan soybeans is 12.18 and then 12.07 ½ which was Mondays low. Resistance crosses at 12.50 to 12.53.
Friday Taiwan purchased an unknown quantity of Ukraine corn. In addition, 60,000 tonnes was purchased from Brazil. The Ukrainian product was purchased at $280 to $290 per tonne. The Brazil origin was purchased at $330 per tonne. This is a concern as a traditional US market has found cheaper priced product elsewhere.
There is a risk of loss when trading futures and options contracts.