November Jobs Data Less Than Inspiring

December 2, 2011 02:12 AM

What Traders are Talking About:

* Jobs data -- some good, some not so good. Non-farm payrolls increased 120,000 in November, which was just short of the pre-report guess of 122,000. But upward revisions of 20,000 jobs in October and 52,000 jobs in September were added to previous data. The unemployment rate dropped to 8.6% -- the lowest since March 2009 -- due to a combination of workers leaving the job force (-315,000) and revisions to past data.

The long and short of it: Market reaction has been muted, suggesting traders are more focused on jobs creation than the unemployment rate.

* China produced how much corn this year?!? China produced a record 191.75 MMT of corn in 2011, according to official data from the National Bureau of Statistics, an 8.2% increase from 2010. That's sharply above the latest forecast of 184.5 MMT from both USDA and the state-run China National Grain and Oils Information Center -- and even more sharply above private crop estimates. Due to the surge in corn production, total grain output this year was record large at 571.21 MMT -- a 4.5% increase.

The long and short of it: There are doubts about the validity of the estimate as most feel China is trying to calm domestic prices and reduce its apparent need for corn supplies in the year ahead. But that's the "official" figure from the government.

* Glimmer of fundamental hope in wheat? Ukraine cut its 2011-12 wheat export estimate to around 6 MMT from a prior forecast of 9 MMT to 10 MMT, according to the head of the ag ministry's planting division. Also, supplies of high-protein wheat are tight, prompting some Asian buyers to be more proactive in their pursuit of milling-quality wheat. This isn't enough to spark a major rally in wheat, but it may be enough to help put in a short-term low -- if corn also posts a low.

The long and short of it: Notice that I phrased the headline as a question. Fundamentals are still far from bullish for wheat, but after months of struggling amid increased global export competition, it appears there may be a light at the end of the tunnel for the wheat market.


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