Thus far in 2011, the grain has lost 3.6 percent of its value while soybean futures have dropped 18 percent and wheat futures have lost 23 percent. A Chartered Bank analyst notes demand for soybeans from China is projected to increase as high as 60 million metric tons, which would exceed the 56.5-million-metric-ton forecast issued by the U.S. Department of Agriculture.
"Overall we still expect markets to trend higher in Q1-2012, although at a less aggressive pace than we saw at the start of the year, as they remain pinned down by uncertainty," analyst Abah Ofon told the news service. "We also believe investor demand will return, but this will depend very much on sentiment, which in turn hinges on developments in the euro area."
At 1:19 p.m. on Tuesday, corn futures dropped 0.37 percent, a 2.25 cent reduction to $6.0275 per bushel. At 1:18 p.m., soybean futures fell 0.24 percent, a 0.7 cent loss to $2.906 per ton. At 1:17 p.m., wheat futures slumped 1.11 percent, a 6.75 cent loss to $6.0225 per bushel.
ForexPros reports corn futures were poised on Tuesday to bounce back from scraping their lowest value since early October on Monday. Drivers for corn's rebound include the weakening U.S. dollar as well as signals that Chinese demand for corn will remain strong and bolster prices. China is the globe's top consumer of corn.
When the dollar weakens, U.S. crops distinguish themselves to international purchasers while additional commodities draw more attention as an alternate investment.
Late Monday, credit rating service Fitch Ratings noted U.S. political leaders failing to establish a working plan to reduce the budget deficit by $1.2 trillion during the next 10-year period will prompt a rating outlook revision to negative and not a downgrade. Since then, market sentiment has eased, ForexPros reports.
Standard & Poor's, another rating service, stated the U.S. will not suffer a downgrade at its hands though S&P reduced the U.S.' AAA rating to AA+ in August.
After corn futures fell almost 1.8 percent on Monday and touched their lowest value since October 5, fears spread about debt – both in the U.S. and across the Atlantic in the euro zone. Investors' interests were oriented away from assets considered more risky.
But with Chinese demand increasing, investors were not too concerned about corn prices continuing to drop. Thus investment at the lower price ensued as investors were on the hunt for bargains.
On Monday, customs in China disclosed imports of corn during October established 13-month highs of 304,300 tons. That figure represents a 68 percent increase as compared to the Asian nation's imports of corn during the month prior. As compared to October 2010, import figures from this year were 21 percent higher.
ForexPros reports Standard Chartered took that Chinese import data and increased the forecast for average corn price during the first quarter of next year. The driver cited by the bank is pessimism about U.S. shipments of corn being overdone.
The Pork Network reports the market managed to stabilize while at rest between trading sessions on Monday and Tuesday. As the U.S. holiday of Thanksgiving approaches, trade volume is likely to be lighter.
Cash prices are likely to drive higher next week as the calendar year drives toward the final month of 2011 and the holiday season gains momentum.
THIS MATERIAL IS CONVEYED AS A SOLICITATION FOR ENTERING INTO A DERIVATIVES TRANSACTION.
THIS MATERIAL HAS BEEN PREPARED BY A DANIELS TRADING BROKER WHO PROVIDES RESEARCH MARKET COMMENTARY AND TRADE RECOMMENDATIONS AS PART OF HIS OR HER SOLICITATION FOR ACCOUNTS AND SOLICITATION FOR TRADES; HOWEVER, DANIELS TRADING DOES NOT MAINTAIN A RESEARCH DEPARTMENT AS DEFINED IN CFTC RULE 1.71. DANIELS TRADING, ITS PRINCIPALS, BROKERS AND EMPLOYEES MAY TRADE IN DERIVATIVES FOR THEIR OWN ACCOUNTS OR FOR THE ACCOUNTS OF OTHERS. DUE TO VARIOUS FACTORS (SUCH AS RISK TOLERANCE, MARGIN REQUIREMENTS, TRADING OBJECTIVES, SHORT TERM VS. LONG TERM STRATEGIES, TECHNICAL VS. FUNDAMENTAL MARKET ANALYSIS, AND OTHER FACTORS) SUCH TRADING MAY RESULT IN THE INITIATION OR LIQUIDATION OF POSITIONS THAT ARE DIFFERENT FROM OR CONTRARY TO THE OPINIONS AND RECOMMENDATIONS CONTAINED THEREIN.
PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE PERFORMANCE. THE RISK OF LOSS IN TRADING FUTURES CONTRACTS OR COMMODITY OPTIONS CAN BE SUBSTANTIAL, AND THEREFORE INVESTORS SHOULD UNDERSTAND THE RISKS INVOLVED IN TAKING LEVERAGED POSITIONS AND MUST ASSUME RESPONSIBILITY FOR THE RISKS ASSOCIATED WITH SUCH INVESTMENTS AND FOR THEIR RESULTS.
TRADE RECOMMENDATIONS AND PROFIT/LOSS CALCULATIONS MAY NOT INCLUDE COMMISSIONS AND FEES. PLEASE CONSULT YOUR BROKER FOR DETAILS BASED ON YOUR TRADING ARRANGEMENT AND COMMISSION SETUP.
YOU SHOULD CAREFULLY CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR CIRCUMSTANCES AND FINANCIAL RESOURCES. YOU SHOULD READ THE "RISK DISCLOSURE" WEBPAGE ACCESSED AT WWW.DANIELSTRADING.COM AT THE BOTTOM OF THE HOMEPAGE. DANIELS TRADING IS NOT AFFILIATED WITH NOR DOES IT ENDORSE ANY TRADING SYSTEM, NEWSLETTER OR OTHER SIMILAR SERVICE. DANIELS TRADING DOES NOT GUARANTEE OR VERIFY ANY PERFORMANCE CLAIMS MADE BY SUCH SYSTEMS OR SERVICE.
GLOBAL ASSET ADVISORS, LLC (“GAA”) (DBA: DANIELS TRADING, TOP THIRD AG MARKETING AND FUTURES ONLINE) IS AN INTRODUCING BROKER TO GAIN CAPITAL GROUP, LLC (GCG) A FUTURES COMMISSION MERCHANT AND RETAIL FOREIGN EXCHANGE DEALER. GAA AND GCG ARE WHOLLY OWNED SUBSIDIARIES OF STONEX GROUP INC. (NASDAQ:SNEX) THE ULTIMATE PARENT COMPANY.