Timothy Hughes | 602-859-4100 | thughes@pricegroup.com
8/26/11 General Comments:
Finally the wait is over and Mr. Bernanke has spoken. The Fed will keep a vigilant eye on the situation and he wished that Congress and the White House would get their act together. I guess the Fed is just there to help and hasn’t caused any negative impact on the economy. What? Now begins the wait for the September Fed meeting.
Corn : As I am writing this corn appears to be headed for a strong close today. We are back to fundamentals of a weather market. Dry fields in Iowa and Illinois have received little rain this week. The last 8-14 day forecasts out on Wednesday show warmer temps spreading over the corn belt. There is a possibility for another storm to hit the Gulf Coast at the end of that period. Technically it appears we will retest the $7.9975 high made in June.
Pro Farmer released their estimates of corn and bean production estimates from their tour. A very bullish estimate in my opinion. They are estimating 2011 corn crop at 12.484 bbu with an average yield of 147.9 bu/acre
Soybeans: November beans are closing above $14 after trying at least six time since February. Closing well above the $14.1125 high should attract more buying next week. Beans have a bull flag formation on the weekly chart and a test of the high on the formation at $14.5575 should happen. Forecasts for a potential La Nina in Argentina and Brazil this fall and worries about yield in the US should keep upward pressure on prices. The only wild card remains the stock market and a hard break there would negatively affect the beans.
Pro Farmer estimated the 2011 soybean crop at 3.083 billion bu.
Cattle: Packers have been more in control this week but the market seems to have found some footing at the end of this week. October is usually the weak period but I expect it to retest the $118 level in the next two weeks.
Treasuries: Still standing aside.
US Dollar: The dollar appears to be signaling the formation of a bottom when I look at the Forex USD/CHF chart. The weekly chart especially looks like a bottom to me. We should see a rally from here to .8500 level and above that the next huge area of resistance is .9500. How this plays out in the commodity futures could be very important. A bottom against the Swiss Franc should signal a break in gold and silver.
Questions? Ask Tim Hughes today at 602-859-4100
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