Volume Dips As Traders Reduce Risk
Nov 15, 2011
Volume Dips As Traders Reduce Risk
Good Morning! Paul Georgy with early morning comments for November 15, 2011 at 5:20 am. Markets were mixed overnight. Are we going to see turnaround Tuesday provide some buying during the session? Traders seem to be keeping risk to a minimum as we approach Thanksgiving holiday. Traders may give Greece and Italy some time to develop new governments and enact their austerity plans. This could quiet the news for a while but the problems are not going away. The bond auctions in Italy and Spain have meant the governments will have to pay more for their borrowings. Not a good path for recovery. The news on the weather front remains the same. South America is in good shape and the southern plains in the US should get more rain this week. The Ukraine crops are still dry going into dormancy. Exports shipments are behind and NOPA crush was at the low end of estimates. Harvest is all but complete as USDA reported soybeans 96% done and corn 93% done. The CFTC Commitment of Traders Report showed funds increasing long positions in corn and decreasing long positions in soybeans. Cattle futures were higher overnight supported by the stronger cutout values, choice up 1.38 and select was up 2.38. Nearby live cattle futures are at a considerable discount to cash. Lean hogs were sharply higher on fund buying in the February contract yesterday. Pork cutout values were down .46 on Monday. We expect the macro markets and headline traders to be the key influence to the agricultural market this week. Use the charts to help with entry and exit points in your trading.
Markets as of 5:20AM
Corn—2 to 4 higher Beans—12 to 14 higher
Wheat—1 to 3 lower
Live Cattle—5 to 15 lower Lean Hogs—5 to 15 lower
Dollar— .40 higher Crude— .45 lower
Gold— 14.70 lower
Allendale Advanced Charts
Once again the dollar index found support at the 38% retracement level and rebounded to close near session highs. This market needs a breakout of the current range 78.40 resistance and 76.70 support. The direction of breakout will likely see some acceleration due to stop being hit.
Nelson Notes from the desk of Rich Nelson
The only measurement of monthly soybean crush levels, since the US Census Bureau stopped collecting the data, is now the industry organization NOPA. October crush was estimated at 141.179 million bushels. That was slightly less than 142.25 million bushels expected. We remain under the pace needed to meet USDA. September and October crush totaled 12% and 7% under last year. USDA’s thinks total year crush will fall only 1%.
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.
