Comments at the Close – 12/6/12

12/6/12 GLOBAL COMMODITY ANALYTICS & CONSULTING LLC

CLOSING GRAIN COMMENTS:

The stronger price‐action and technically‐led rally on Wednesday was cutshort
Thursday by a corn‐led sell‐off as weekly export sales for corn in
the latest USDA report were barely over 1 Mln. Bu.—the lowest Net Sales
figure I can find since early September, and before that weekly sales
haven’t fallen this low since the Fall of 2008 based upon my research. By
Thursday’s close, Dec. corn was testing its 40‐day Moving Avg.

With the stunningly poor weekly corn export sales and also with Brazil’s
official crop agency, CONAB, releasing an updated bean production figure
of 80 and 83 Mln. Metric Tons, beans were not able to charge higher after
USDA reported much larger than expected weekly export sales in beans of
1.1 Mln. Metric Tons. In addition to this, soymeal weekly export sales
were 87% above the 4‐week average. As of this week, the YTD accumulated
bean export inspections are running just under 50% more than last year—
suggesting that at the current pace there is much more rationing which
needs to be accomplished before next spring. As a result of the exports,
although beans couldn’t rally to new weekly highs and take‐out $15 in
lead‐month futures, meal and beans were able to hold positive gains
heading into Thursday’s close.

As for the wheat, it appeared to be more of a follower, even though
weekly export sales were within trade guesses and the mid‐day weather
models for the southern plains continue to suggest little if no relief
for the hard red wheat belt for the next 6‐10 days.

CLOSING LIVESTOCK COMMENTS:

The technical sell signal that was suggested on Wednesday’s trade seemed
to gather momentum and build on Thursday’s hog trade, with the lead‐month
futures falling over 1 ½% by the close of the trading session. And it was
especially interesting to note this big of a futures break to the
downside in light of reports that the cash markets are still being bid‐up
by packers in some areas of the country…still buying for a weekend
kill.

Meanwhile, over in the cattle prices were able to diverge from the hogs,
with the Feeders jumping on corn price weakness and rallying over 1% on
Thursday’s session. This helped to keep the live cattle underpinned and
higher into the closing bell. Feb. Live Cattle in fact had their best
performance in a week after testing again and holding again for a 5th
trading day in a row crucial support at both the 50‐ and 200‐day Moving
Averages.

Please Remember: There is a substantial risk of loss in trading futures and options, and
the impact of cycles or current events on prices may be already reflected in futures.

For More Information, Contact Mike Zuzolo At 765 471‐1600 or Online at www.globalanalytics.biz

Copyright, 2012 Global Commodity Analytics & Consulting LLC

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