LTN's Closing US Agriculture Comments
Grains close higher Thursday
The FOMC sparked commodity bulls back to life by announcing what many dubbed "QE-infinity" Thursday.
The USD index promptly sold off, leading to a rally in commodities, highlighted by the almost $40 move in Dec Gold.
Gold turned so volatile the exchange threw on the brakes twice over the course of the session, halting trade.
Corn and Soybean were supported by the moves in the other markets.
Wheat futures rallied into the close to end with gains ranging from roughly 10 to 12 cents at all 3 locations. Gains in the corn market along with sharp losses in the USD index following the Fed's announcement that it will launch an unconventional bond-buying program to stimulate the economy returned buyers to the Wheat market Thursday.
Corn futures didn't stray too far from unchanged through the day but benefited from late-session buying to end 4.25 to 5.75 cents higher in the September through July contracts. Far-deferred futures ended 2.75 to 10.25 cents higher. Early buying in the Corn pit was limited as traders still have Wednesday's higher-than-expected Corn crop estimate on their minds.
Soybean futures faced pressure most of the day but firmed when the Federal Reserve announced it will embark on a third round of quantitative easing. Futures faced profit-taking pressure ahead of midday after USDA's confirmation of tight supplies led to an impressive rally in the Soybean market yesterday. But the announcement the Federal Reserve would move to stimulate the economy gave the commodity sector a lift.
Oct Cattle surged to a new 6-month high midday and closed just below Wednesday's high. The supportive tilt early on was linked to stronger than expected cash Cattle prices, improving wholesale Beef demand, and a weaker Corn market. Texas cash Cattle traded from $126.00 to $127.00 late Wednesday which was up $2-$3 from the week prior. Cash basis Cattle in Kansas also rose $3 from last week to $127.00.
Lean Hog futures faced pressure much of the day, but the market firmed late in the session to end with gains ranging from 2.5 to 50 cents. The lean hog market benefited from late short-covering after the USD plummeted following the Federal Reserve's economic stimulus program announcement. Plus, mostly steady cash Hog bids today were an improvement over recent weeks.
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster's Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.