Grains here at mid-day are heading into Wednesday’s USDA Report with liquidation pressure

3-9-10

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

GOOD DAY EVERYBODY, HERE’S THE LATEST AT THE MERC AS WE HEAD INTO THE MID-DAY SESSION:

• Grains here at mid-day are heading into Wednesday’s USDA Report with liquidation pressure—pricing-in a more bearish mindset, probably with the idea that if the report is bearish, potential sellers won’t have to jump in on a really negative trade.

• Outside markets aren’t helping either: earlier in the morning before the overnight Globex trade closed, a key currency policymaker in China noted that they would continue to buy US Dollars—this sent the Dollar higher, Gold lower, with Crude following. So, both outside market pressure as well as a bearish pre-report mindset has the grains down double-digits in beans and over 1% lower on the day for corn and wheat as well.

• Soymeal in particular is once again weighing on the markets this Tuesday; Deliveries of 400 contracts against the March Contract were not only large, they were reportedly issued by Bunge, a well-known processor. If a processor is issuing or selling meal against the March, which would suggest that soymeal demand is weakening to the point where the processor is willing to let it go. Thus, the soymeal is the leader to the downside.

• As we head into the close, with key support lines violated in both the crude and gold, I’m going to assume that the current sell-off won’t see much short-covering, except maybe some just before the closing bell. Wednesday’s low of $9.18 is a key support for new-crop November Futures—let’s see if this holds.

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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