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Archived Market Commentaries:
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Date:
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12-4-09
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Headline:
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Closing Grain Comments
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Comments:
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Top Ag elevator hours for the weekend are as follows:
Addieville/St Libory/Pierron: Sat: 8 am - Noon; Sunday: Closed.
Trenton: Sat: 8 am - Noon; Sunday: Closed.
Okawville: Sat: Closed. Sunday: Closed.
Starting Monday, Dec 7th, all Top Ag elevators will return to their winter schedule of Monday-Friday: 8 am-4:30 pm & closed on Saturdays.
Closing Comments: 12/04/09
Friday was a great example of how "good" news can trigger "bad" results. After grains traded mixed overnight awaiting this morning's US Nov employment report, surprisingly strong jobs data fueled reversals in short US dollar positions that sent grains, bonds & other commodity markets cascading lower today. The Labor Dept reported this morning that US employers cut "only" 11,000 jobs during Nov--far below the 130,000 job loss economists forecast. Sept-Oct data was also revised to show 159,000 fewer jobs were lost than first reported. The US unemployment rate was reduced by 0.2% to 10.0%. Overall, today's data showed the least monthly job losses since Dec 2007. That's the official start to what's proven to be the worst recession since the 1930s. The data hinted that the US economy is not as weak as feared. That led to short-covering in the dollar on ideas the Federal Reserve would start raising interest rates sooner rather than later. As the dollar soared 1.75% to test 9-month downtrending chart resistance, traders reversed trading strategies that had them short the dollar & long bonds, long grains, long gold, & long crude oil. March corn sagged thru the day to settle with a low-range 12.25c loss. Jan beans--buoyed by 8.524 mb sale to China--fought the downdraft to settle with a mid-range 4c loss. March CBOT wheat--the commodity most likely to be impacted by dollar strength--sagged to a low-range 13c loss. For the week weekly corn charts declined 23.5c, beans lost a dime, & wheat dropped 12c. March corn closed below 5-week uptrending chart support & March wheat closed below 9-week uptrending support this afternoon--keeping their trends looking tenuous to start next week. Because the US dollar index closed on 9-month downtrending chart resistance lines this afternoon, a push by the greenback above Friday's daily (& weekly!) high on Monday would create the potential to cause further gold, copper, crude oil, & grain "carry trades" to get unwound.
This afternoon's CFTC Commitments of Traders data showed speculators & index funds continued to load the boat with ownership thru last Tuesday's reporting deadline. The extreme length of the spec funds--& failure of prices to follow-thru higher after early month money was invested--warns of buying exhaustion. Monday needs to see chart support develop in a wide array of commodities to prevent further speculative liquidation-driven losses!
The continuing harvest pressured both corn futures & cash basis levels ahead of the weekend, but firm export demand amid the completed harvest supported beans today. Locally, corn basis declined 4c, but bean & wheat basis gained a penny on Friday. For the week cash corn crashed 40c lower, soybeans declined 11c, & wheat dropped 12c. Some St Louis terminals are having troubles handling corn greater than 17% moisture. Some are restricting delivery hours or penalizing an extra dime above the regular discount schedule.
Do you have non-GMO corn or soybeans or other specialty grain varieties that may be eligible for direct ship programs? Give Mike a call at the Okawville elevator at 243-5293 & let him know what varieties & quantities you have available. He'll keep you informed of what marketing programs develop. If fall fertility or winter weed control applications are part of your management program, contact your local Top Ag Agronomy Center at Okawville, Trenton or Pierron for all your fertilizer & weed control needs.
"Closing Comments" are written by David Marshall, Toay Commodities Futures Group LLC, Nashville, IL. To learn more about his farm marketing advisory or commodity brokerage services, contact him at dmarshall@tcfg-llc.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness. Commodity trading involves risks. You should fully understand those risks before trading.
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