|
PitGuru.com's Grains Analysis: Dec 19, 2011
Sunday, December 18, 2011
by PitGuru.com Authors of PitGuru.com
|
|
The Grains Review
For the week of December 19, 2011
By Matthew Pierce
Coming back from the weekend there is a modest amount of bullish momentum built up in agriculture. All markets were higher across the board overnight led by beans which is gaining due to expansive dryness in Southern Brazil and central to Northern Argentina. This dryness has many holding their collective breath heading into the holiday with world corn stocks relatively tight while beans have a bit more room but not enough for the world to survive any major production disaster in the southern hemisphere. The one crop not directly threatened is wheat. Argentina is still set on production and India just announced a record 85.93 MMT crop. World wheat stocks are ample and there is only modest concern in the US plains with the current blizzard causing both good and bad results. The possible bullish story for wheat is strictly in Ukraine with some talk of a 30% total loss with another 70% (of the remaining) expected to show very poor quality due to drought and temperature extremes. This adds to the world feed wheat total while making higher protein wheat a continuing issue moving into the final stretch of 2012.
With macros seeming content at current levels there is little direction from outside influences. This allows a small problem in S. America to help oversold daily indicators to bounce. A continuation of Friday’s momentum is expected to start the week but sustainability of this move is questioned. Momentum can carry things only so far and markets need a upside move out of the Euro and crude to really light any fire so don’t get ahead of yourself with bullish momentum today. The next two weeks could offer a major chop with money flow still the biggest factor into the end of the month.
Spreads to watch include CN12-CZ12 which should continue to tighten in spite of the bullish move. KWH-K is starting to tighten with more bull spread potential as Australian quality tanks. SN12-SX12 showing a 10-cent inverse is questionable with US stocks ample to say the least. I would look for this spread to move to a 10-20 carry in the coming days.
EU Wheat was .75 Euro higher overnight gaining on CME momentum. The trade currently sitting at 178.00 is capped by continual export pressure from Russia and Australia. Reports have China “stockpiling” corn in the NE province of Jilin at about $356.00 (USD converted from 2,245 Yuan) per metric ton. This program is expected to extend through April 2012.
The “Risk On” trade into year-end has been widely thrown around and is another possible bullish impact heading into the post Christmas week.
Recent articles from this author
- PitGuru.com's Grains Analysis: May 14, 2012 - Sunday, May 13, 2012
- PitGuru.com's Grains Analysis: May 07, 2012 - Sunday, May 06, 2012
- PitGuru.com's Grains Analysis: Apr 30, 2012 - Sunday, April 29, 2012
- PitGuru.com's Grains Analysis: Apr 23, 2012 - Sunday, April 22, 2012
- PitGuru.com's Grains Analysis: Apr 16, 2012 - Sunday, April 15, 2012
About the author
Daniel Cronin - PitGuru.com's Energies & Metals Guru Daniel Cronin has spent years on the floor of the Nymex as part of one of the largest energy floor brokerages in the business. His extensive experience stems from not only his Pit background but also through intense studying and implementation of complex technical analysis and market trading techniques via the mentorship of the now retired Ralph Acampora. Mr. Cronin brings subscribers a rare combination of book smarts and real world trading experience in one of the most volatile market sectors in the futures industry. Matthew Pierce - PitGuru.com's Grains Guru Mr. Pierce is a unique acquisition for Futures Press Inc. in that he has an unmatched level of real hands-on experience within the industry in addition to his floor trading expertise and top notch education at the University of Illinois College of Agriculture. Matthew has literally cultivated the perfect professional career as a grain expert by working with the industry's most recognizable companies such as Cargill, LaSalle Group, Conagra, Walsh Trading Inc. and many more. In addition to trading on the floor of the Chicago Board of Trade, Mr. Pierce writes what many in the business believe to be the best kept secret amongst trading reports available in the industry. Jurgens H. Bauer - PitGuru.com's Softs Guru Jurgens owns and operates his own order execution firm on the ICE trading floor. He has been a member since 1987. His firm, Jurgens Bauer and Associates, specializes in executing option orders for a wide array of customers and a variety of industry participants, including individual speculators, funds and members of the trade. While Jurgens has been an active member of the trading community he has also spent time since 2000 working at raising awareness of environmental commodities, educating industry professionals on emissions trading, brokering transactions between private counter parties and developing SO2 and NOx contracts for the NYMEX. Frank LaMantia - PitGuru.com's Financial Guru Soon to be Dr. LaMantia, Frank is not only one of the most educated traders on Wall Street, but also maintains an industry resume of substance and depth. Frank has worked extensively on an Institutional preferred stock syndicate desk, as a government bond specialist, and as a financial advisor all the while achieving multiple licenses in the finance field. With an extensive and impressive client list (including Citibank, Bear Stearns, Lehman Brothers, AG Edwards, Mesirow, UBS, and numerous Hedge Funds), Mr. LaMantia brings his one-of-a-kind background to his current occupation of full time trader.
|
