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MF Global, European Economy Cause Erratic Trading

November 4, 2011

This information is provided by Archer Financial Services, Inc., 800-933-3996.


You could say that it was almost like this week did not even exist.  However, the clients and employees at the commodity trading firm MF Global would strongly disagree. 
Once again most of the news surrounding the trade at the CBOT occurred off of the trading floor. The week began with the news that MF Global had filed for bankruptcy. That news sent clients and employees of that company scrambling to try to find a new home. In addition, the exchange and the remaining clearing firms were preoccupied with aiding in the transition of accounts and money to a new and safe location. 
The European economic issue continued to be the background noise to the grain markets that added to an already erratic and choppy trade.
In the end, December 11 Corn only managed to scratch out a close ¾ of a cent above last week’s close. 
The good news is that it is likely that some sense of normalcy and sanity may return to the market next week, as the grain markets will get the opportunity to focus on their own supply and demand factors instead of the unpredictable background noise that has been driving the market on a daily basis. 
Look for December corn to move back toward $6.80-$7.00 with a yield estimate at or below 146 bu./acre, while a yield closer to 150 bu./acre may send the market back to support toward $6.20-$6.00.  Producers should look to advance sales on a move in March futures toward $6.90. 
Conversely, end users can look to extend coverage on a move below $6.30 basis March futures. 
Wednesday’s report may not be able to break the market out of its current trading range, but it will likely determine which end of that range we will visit next.

(click the charts below to enlarge)

 Market Movement 11 4 11


Weekly Prices 11 4 11


COT 11 4 11



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