European Central Bank Dumps More Cheap Money into System
Feb 29, 2012
Good Morning! Paul Georgy with early morning comments for February 29, 2012 at 5:15 am. Grain markets are slightly higher this morning. The strong cash markets, smaller South American production and the talk of inflation have grain markets setting new highs. Gulf basis was higher yesterday as producers are not willing to let go of old crop soybeans. The continuous lowering of estimates of Brazilian and Argentine soybean production has finally convinced traders that maybe they should be concerned. Money flows coming in on the buy side as traders try to get ahead of the second part of the Long Term Refinancing Operation by the European Central Bank (ECB) has impact on commodities. The ECB dumped 530 million Euros into the system this morning which was in line with trade expectations. Traders will be watching Fed Chairman Ben Bernanke’s Humphrey Hawkins testimony today. It is expected he will make sure the market is aware further monetary adjustments will be made if necessary. The injection of monies by EU or US is fueling the inflation card again. On Thursday the International Swaps and Derivative Association will rule if Greece defaulted due to the ECB’s special bond swap with Greece. Wholesale beef values closed at record highs again on Tuesday. Choice was up .09 and select was up .69. There were a few cattle traded in the south at 128.00 which would be steady with last Friday. The weaker dollar is supporting the idea of improving exports of pork and beef. You can help by participating in the Annual Allendale Planted Acreage Survey just click here.
Markets as of 5:15 AM
Corn +1 to +2 Live Cattle +35 to +90 US Dollar Index -.01
Beans +1 to +3 Lean Hogs -05 to +20 Crude Oil +32
Wheat +3 to +5 S&P Index +1.25 Gold -3.38
Allendale Advanced Charts
May beans have closed for the second time above the 50% retracement level which puts next resistance at 13.34 area. The 12.92 area should provide initial support.
Nelson Notes from the desk of Rich Nelson
US: Over the past few weeks July soybeans have advanced faster than November. Private analysts have suggested big old crop soybean stocks would get even bigger for the new crop. USDA’s AgForum conference suggested the opposite, that big old crop stocks would actual decline a good deal. Will the market reconsider this spread?
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