Issue Date: November 06, 2009
Wheat Sets Back as Dollar Levels Off
Many factors can be attributed to the recent setback in wheat. One of the primary fundamental factors is the fact that US wheat is not very competitive in the export market. Additionally, the market sees better prospects for completing the winter wheat plantings. Finally, recent weakness in the corn and soybean markets has generated some additional selling in the wheat complex. However, one probably has to credit the leveling off of the dollar, as well.
Fund buying has been prevalent on days that the dollar has traded lower. All three wheat markets continue to trade near their respective 20 day moving averages, which will likely result in a choppy trade. If the dollar doesn’t post a considerable break and the corn and soybean harvest doesn’t experience unexpected delays, the wheat market should continue to work lower. Perhaps a 30 to 40 cent selloff is in order. I would be looking to buy that break. I believe the investment community will continue to want to buy commodities.
By Brian Henry
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The Poor Turnips
As central bankers and energy traders around the world await today’s jobs report, employers are wondering just how much blood you can squeeze out of a turnip. The turnips are getting major league squeezed as third quarter productivity surged to an annual rate of 9.5%. That follows the second quarters’ 6.9% rise which was the biggest back to back increase since 1961! And you can’t credit Windows Seven for this as it was not yet released. Anyone else go bats watching that stupid circular thingy go around on Windows Vista? No, this was the American workforce getting pushed about as hard as you can push them and by employers slicing and dicing every place that they possibly can. Who is counting the staples? Well someone is as unit labor costs a measure of what it costs firms to pay workers for a single unit of output they produce fell by a whopping a 5.2% annual rate. What, are they copying on both sides of the paper? That is down 3.6% from a year ago which they say is the biggest year over year drop since the Labor Department began keeping records in 1945.
By Phil Flynn
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How High Can Sugar Prices Go?
If you want to see a bullish long term chart, take a look at the weekly sugar market. What you see is a market that bottomed in the 10 cent to 12 cent range and has subsequently doubled in price. One should also notice a very large consolidation in prices roughly between 21 and 24 cents/lb. This consolidation is possibly a topping formation or possibly a massive bull flag formation before staging another up leg.
It’s my opinion that this is likely a bull flag formation and that sugar, at some point in the near future, will stage another leg upward. A close significantly above 24 cents, on the weekly chart, will target sugar prices to 35 cents and possibly higher. Sugar prices staged a huge rally in the mid 1970’s and peaked at 66 cents and then surged again in the early 1980’s, peaking at 45 cents.
By Dennis Smith
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