Argentine Crops Continue To Bake Under Hot, Dry Conditions

December 29, 2011 12:06 AM

What Traders are Talking About:

* South American weather update -- Argentine crops continue to bake. Forecasts for Argentina remain hot and dry through the 10-day period. Crops there are baking under the adverse conditions and more private crop watchers are cutting their forecasts. In Brazil, some private weather forecasters have increased rain chances in Parana, Mato Grosso do Sul and northern Rio Grande do Sul through the weekend as cooler air passes through. But the driest areas of southern Rio Grande do Sul are expected to remain dry.

The long and short of it: South American weather remains price-supportive, especially for corn, which is being stressed at the key pollination stage. The concern for soybeans has eased some, mainly because of the rain chances and cooler temps across much of Brazil's key production areas.

* Italian bond yields ease. Italy's much-awaited bond auction resulted in lower yields, but the results of the auction were nothing for investors to get too excited about. Italian 10-year bond yields eased to 6.98% from a record 7.56% last month while three-year bond yields dropped to 5.62% from 7.89% in November.

The long and short of it: The drop in Italian bond yields is mildly positive, but they continue to hover near "danger" levels.


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