Volatile Markets Expected Into Friday’s Report
Mar 27, 2012
Good Morning! Paul Georgy with early morning comments for March 27, 2012 at 5:10 am. Grain futures are firmer as markets set the stage for the USDA report on Friday morning. Pre-release trade estimates are suggesting lower quarterly stocks and more planted acres for both corn and soybeans. Rich Nelson released to our subscribers’ yesterday afternoon a chart showing the reaction to quarterly stock data for corn in the last 3 reports. The average price decline for corn was nearly 37 cents after the data was released. The spread relationship between December Corn and November Soybeans closed at a new high 2.40/1. Dryness issues in the EU have traders concerned about wheat getting started there while rain is limited in the forecast for the next 10 days. Although traders will be focused on the USDA Report as we get closer to Friday, the macro markets will have its influences. Traders are talking about a possible QE3 after Fed Chairman’s speech yesterday. This type of chatter is fueling inflation buying interest in the grains. The Eurozone has been quiet after the ECB dumped money into the system, however the story is not over. On the livestock side, product continued on the streak of lower values. Choice was down .66 and select was down .01. The Lean Finely Textured Beef story has caused the closing of several plants and 650 jobs. This needs to be put behind us in order to rebound beef prices. Pork cutout values were .15 higher on Monday while futures indicators are registering oversold. Allendale has a special pricing for the Allendale Research center go to www.allendale-inc.com
for more details.
Markets as of 5:10 AM
May Corn +5 May Beans +7 May Wheat +2
Apr Cattle -.12 Apr Hogs -.22 May Crude +.25
Jun $ Index -.11 Jun S&P +1.00 June Gold +7.60
Allendale Advanced Charts
Corn was unable to hold onto early gains yesterday and settled near session lows. The late session selloff pushed prices below the uptrend line. It is important to close higher today in order to maintain a positive picture.
Nelson Notes from the desk of Rich Nelson
The Reuters newswire poll of 25 analysts found the average trade guess for corn acres at 94.720 million. That is above the group’s February poll of 94.2 million. It represents a 2.799 million acre increase over last year.
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.