A role-reversal is what we saw in the agricultural commodity futures this Thursday

3-11-10

GLOBAL COMMODITY ANALYTICS & CONSULTING LLC MID-DAY GRAIN UPDATE:

GOOD DAY EVERYBODY, HERE’S YOUR CLOSING GRAIN COMMENTS FOR THIS THURSDAY:

• A role-reversal is what we saw in the agricultural commodity futures this Thursday, with the beans taking-back all their gains from Wednesday while the wheat and corn more-or-less watched and traded a 5-7 cent daily range all day. Clearly, the biggest volume and volatility took place in the soy complex.

• The lowest weekly export sales in nearly 8 years for beans, thanks mostly to Chinese cancellations, brought the demand bears back into the soy complex, which likely ignited the recent longs in the market to turn-tail and sell-out of their positions on the opening. And as Thursday’s trading day progressed, the product markets both weakened further, adding even more pressure to the beans. As a result, the bear-spread was very active and beans closed at the lowest price in 19 sessions.

• Because the wheat and corn maintained a fairly calm trade, I suspect that inter-commodity spread unwinding was very active, where both the corn and wheat were the buy side for spread-traders and beans were the short-side.

• The price action on Thursday thus sets-up the grains for a rocky conclusion to the week—weather didn’t help the bulls on Thursday, nor did the outside markets. We’ll see if they can help support trade on Friday.

• On the close Thursday, Corn Steady to Down 1/4; Beans Down 20-26; and Wheat Down 2 on the Day.

GOOD DAY EVERYBODY, HERE’S YOUR CLOSING LIVESTOCK COMMENTS FOR THIS THURSDAY:

• While it was a much more quiet day in the cattle complex, the hogs saw quite a bit of long liquidation, with the April Futures falling below a key daily trendline support—stimulating what looks to be a technical sell signal as we head into the end of the week. While weekly beef exports offset slow cash markets and helped underpin the fats on Thursday, hogs slipped thanks in part to a lower cut-out prices and a weaker wholesale ham market as we draw closer to Easter.

• Thursday’s close at the Merc showed Hogs Down 60-80 while Cattle Traded Down 5 to Up 30.

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The information above is not meant to be advice to buy or sell futures or options. Copyright, 2009 Global Commodity Analytics & Consulting LLC