Grains are Retesting Recent Lows in Early Trade
Sep 26, 2012
Good Morning! Steve Georgy with early morning comments for September 26, 2012 at 5:10 am. Grain futures are trading lower once again as we get closer to the quarterly stock report on Friday. The trade volume yesterday was the lightest volume we have seen in more than a month. It has been a while since we have seen the dollar and energy markets influence the direction of the grains but we are seeing more of that this morning. The dollar is up again due to more concern over European stability. The Bank of Spain has now warned their country that Spain is in a "deep recession". This has many protesters demonstrating against the Government’s austerity drive. This is Spain’s second recession in three years. The unemployment rate has now climbed to nearly 25%. The charts for the grains continue to look weak as we move toward the recent lows in overnight trade. Corn is still trying to find an area where demand will pick up. Yesterday South Korea bought 133,000 metric tonnes of corn from South America for February delivery. This is concerning for the bulls because this means our prices are still too high. We are also hearing confirmation that an ethanol plant in MN will be shutting down. This is giving renewed concern if we start to see a trend. Cattle markets are finding support this morning after more than a $2 drop yesterday. There were rumors yesterday that cash cattle traded $122 in Texas. This is a $4 drop in cash from last week. The expectation was to see the cash markets steady to a dollar lower this week. This was concerning for the market but seems to be trying to recover this morning.
Markets as of 5:10 AM
Dec Corn -8
Nov Beans -19
Dec Wheat -9 3/4
Oct Cattle +.20
Oct Hogs +.35
Dec Dlr +.23
Sep S+P UNCH
Oct Crude -.63
Dec Gold +.90
Allendale Advanced Charts
Yesterday Oct Live Cattle’s dramatic momentum failure has confirmed a peak and reversal from the 9/13 $128.77 ½ high. With such a severe momentum failure on the chart, the only level of support between today and the double bottom low of $120.00 is the 7/26 $122.15 low. With a confirmed peak and reversal the trend is now down and its continuation should not surprise…Frank La Placa
Get technical analysis for corn, beans, wheat, cattle, hogs, crude and dollar markets.
Nelson Notes from the desk of Rich Nelson
Throughout the year, USDA and the entire grain trade is always estimating "end of the marketing year" ending stock numbers. The end of the old crop year was just on August 31. Friday’s quarterly stocks report is THE report to finally solve this old crop stocks question. The average analyst estimate is for old crop corn stocks to decline from the latest USDA 1.181 billion estimate down to 1.113.
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