S&P Warns of Massive Euro-Zone Downgrade

December 6, 2011 12:08 AM
 

What Traders are Talking About:

* Aussie wheat crop estimate soars; more competition for U.S. corn. The Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) now forecasts the 2011-12 Australian wheat crop at a record 28.286 MMT -- up 8% from its prior estimate. Australian wheat exports were also revised up and are expected to be record large at 21.6 MMT. Heavy late-season rains through eastern production areas of the country are causing quality problems, however, which means the country will have a heavy supply of feed-grade wheat again this year.

The long and short of it: Large tonnages of Australian feed wheat are not a good sign for corn. Many Asian end-users are more actively using to wheat for feed supplies due to better availability and price.

* S&P warns of widespread euro-zone downgrade. Rating agency Standard & Poor's (S&P) put virtually the entire euro-zone on credit watch negative and warned it may downgrade the credit rating of 15 of the bloc's member nations (all except Greece and Cyprus, which have already been downgraded) if no credible plan to solve the region's debt crisis emerges at Friday's summit. A credit downgrade for Germany and France would be most damaging to the global marketplace. But helping offset the negative outlook from S&P is a surprising jump in German manufacturing orders.

The long and short of it: Investors have swallowed the S&P warning relatively well with commodities impacted the most by the news -- so far.

 

Follow me on Twitter: @BGrete


Need a speaker for a seminar or special event? Contact me: bgrete@profarmer.com

Back to news


Comments

 
Spell Check

No comments have been posted to this News Article

Corn College TV Education Series

2014_Team_Shot_with_Logo

Get nearly 8 hours of educational video with Farm Journal's top agronomists. Produced in the field and neatly organized by topic, from spring prep to post-harvest. Order now!

Markets

Market Data provided by QTInfo.com
Brought to you by Beyer
Close