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12-20-2011 07:18 AM
Good moves yesterday in all 3 major products but the volumes were lagging and they will continue to lag today.
On the upside in March corn I am looking at technical levels to the upside at 607 and as some older traders would say 'never sell a quiet market'. Now that I have said that it will probably be just enough to make the entire market trade lower today. Nothing like a negative indicator.
On a bigger note, the dollar is weaker, equities are higher and oil is up as well. The yields on the 10 and 30 year are still very low and I think that if we do have a hiccup in Europe those yields trade to 1.5 adn 2.5 respectively.
My thoughts on the whole EU thing are mainly dollar denominated. If the Euro recovers the dollar will get weaker and our products get cheaper. If the Euro struggles, the dollar will be strong and make rallies muted. And, finally, with the US bank exposure to Europe playing out in front of us with B of A and Goldman share prices hitting the skids, we may have some serious money issues still yet to be played out.
12-20-2011 07:21 AM
And, finally, with the US bank exposure to Europe playing out in front of us with B of A and Goldman share prices hitting the skids, we may have some serious money issues still yet to be played out.
That right there is the understatement of the year!
I see that Italy is gonna l;oan the IMF money so that the IMF can loan Italy some money.
Yep that makes reall good economic sense wonder If I can do that at my Bank?
That is the type of thing the Gold standard stops!
12-20-2011 09:23 AM
As the us dollar gets stronger vs. the Euro doesn't that only affect our exports to the European Union? We ship far more corn to Japan, Mexico, Southeast Asia, and South Korea so it looks like the value of the dollar vs. these countries currency would be more important. Maybe it is not that simple. The US dollar Index is 58% weighted to the Euro so it might not be a good indicator for predicting corn exports based on currency valuations. I don't know about the other grains or meats.
12-20-2011 10:57 AM - edited 12-20-2011 10:57 AM
Is there anyone looking into the increase in margin requirements on commodities(ie gold and silver) and the MF Global problems? Could have there been someone on the CME helping MF with the cash problems by increasing margins? In hindsight, it is just sick that those extra dollars from customers was just put down a rat hole and lost. It wasn't the customer that the CME should have been worried about. You could make the case for the need for less margin requirements. Of course, I am being stupid, if they had enough influence to pull that off, they have enough influence to control that no one gets caught or punished.
I will know we have turned the corner and are fixing problems when the stock market quits acting bipolar.
Inspite of it all, just from the vantage of the little guy, I am very blessed and now more than ever don't envy those that play way out of my league.
12-20-2011 01:34 PM
I don't think the relationship makes much difference anyway for exports of corn given our geophysical location on the globe to most markets. Freight is a larger issue, and distances don't change. If freight changes it tends to change for everyone. When wheat is high priced we tend to export more. If there is plenty of competition globally then one might also assume some of that competition will be closer to a prospective market anyway.