World Markets Show Little Recovery
Nov 11, 2011
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Allendale President and CEO
The outside markets are providing support to grain markets this morning. The overnight session thus far has been quiet with narrow trading ranges. As we talked about yesterday, the market is shifting from the supply side to the demand side of the balance sheet. The weekly export sales numbers confirmed very weak demand for corn and soybeans. Corn sales have fallen to just 102% of a year ago while soybeans are only 64% of last year’s sales. Without fundamental news we have only the macro markets to lead the money flow confidence. The bond auction in Italy provided "hopium" for the Eurozone. However, in reality, Italy is on the cusp of a potential bailout to which EU leaders say no way. The MF Global bankruptcy trustee has put a deadline on getting customer accounts and positions moved to a new clearing firm. If not moved by this weekend positions will be liquidated. Cash cattle on Thursday traded $4.00 to $6.00 higher in Texas and $2.00 to $4.00 higher in Nebraska. Cutout values were higher as Choice values were up $1.24. However the news from the cash market was not enough to support cattle futures from trader liquidation. Hog futures were dominated by bear spread liquidation. We believe you need to stay in close contact with your Allendale representative. We expect extremely choppy markets with headline traders continuing to lead the charge.
Markets as of 5:20AM
Corn—0 to 1 higher Beans—5 to 7 higher Wheat— 0 to 1 higher
Live Cattle—10 to 20 lower Lean Hogs—0 to 10 higher
Dollar— .30 lower Crude— .38 higher Gold— 5.70 higher
Allendale Advanced Charts
Corn tried to break though the 50 day moving average early Thursday but instead broke the 20 day moving average support level. Today will be key in setting the stage for next week’s price action. A lower closed will be second day below uptrend since early October.
Nelson Notes from desk of Rich Nelson
A lot has been made about Wednesday’s USDA report for soybeans. Brazil will take the role as top dog in the export market this 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.